The last few days before the cost of living adjustment (COLA) have finally come and gone. Soon, millions of people who get Social Security will know how much their checks will go up.
The Bureau of Labor Statistics usually uses inflation numbers from July, August, and September to figure out the official cost-of-living adjustment for each year. This is how they figure out the COLA increase.
Cost of living adjustment (COLA) for 2025 to change soon
The numbers for July and August are already out there, but the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) won’t be released until October 10th. That’s also when the 2025 COLA increase will be calculated.
Based on CPI-W statistics for July and August, there is, however, a rough idea of how much the cost of living adjustment will be next year. We can guess how much the average Social Security payment will go up based on that number, assuming it’s correct. You should be careful with that math, though, for one very important reason.
Besides that, Social Security payments got a 3.2% COLA at the start of 2024. Based on inflation data from July and August, however, next year’s rise looks like it will be small, with estimates calling for a 2.5% rise in 2025. At the same time, the average monthly Social Security payout for a retired worker is $1,920 right now.
If the 2.5% COLA prediction comes true, the average Social Security receiver will get an extra $48 a month in 2025. But don’t get too excited about a $48 increase in your monthly income just yet. There’s one more thing to think about.
Will the increase in Medicare Part B affect your Social Security COLA increase?
If a senior is on both Social Security and Medicare, their Part B premiums are taken out of their monthly payments immediately. Medicare Part B cost $9.80 more in 2024 than it did in 2023. Medicare hasn’t said what the monthly Part B standard payment will be for 2025 yet.
It will cut Social Security by about $10 a year for the next year, though, if the rise is similar. This means that the average monthly payment will only go up by $38 instead of $48.
Also, Medicare might not be able to say what the real Part B payment is until after October 10. So, even though SSA might tell you something useful that day, you might have to wait a while to find out how much your monthly payment will go up.
You might not like the idea of a 2.5% COLA for Social Security in 2025. You may also hate the thought of your Medicare premiums going up so much that your cost of living adjustment goes down. Keep in mind, though, that the 2.5% COLA is due to falling prices, not a bigger raise.
A slower rate of inflation may also mean that your monthly Social Security income has more buying power, even if you take into account the fact that the cost of Medicare Part B has gone up. It’s important to note that people who get benefits from Social Security’s retirement, survivor, disability insurance, and SSI programs will get the following amounts if this 2.5% raise goes into effect:
| Retirement benefits | Social Security checks | 2.5% COLA increase | Extra income |
| On average | $1,900 | $1,948 | $48 |
| Age 62 | $2,710 | $2,778 | $68 |
| Age 67 | $3,822 | $3,918 | $96 |
| Age 70 | $4,873 | $4,995 | $122 |
| Survivor benefits | Social Security checks | 2.5% COLA increase | Extra income |
| On average | $1,505 | $1,543 | $38 |
| Individual | $1,773 | $1,817 | $44 |
| 2 Children | $3,653 | $3,744 | $91 |
| Disability benefits | Social Security checks | 2.5% COLA increase | Extra income |
| On average | $1,537 | $1,575 | $38 |
| Blind recipients | $2,590 | $2,655 | $65 |
| Maximum payment | $3,822 | $3,918 | $96 |
| SSI benefits | Social Security checks | 2.5% COLA increase | Extra income |
| On average | $698 | $715 | $17 |
| Individuals | $943 | $967 | $24 |
| Couples | $1,415 | $1,450 | $35 |
| Essential person | $472 | $484 | $12 |
Also See:- Before the Cola announcement, retirees get their first Social Security payout in October
