The Social Security Administration (SSA) will soon reveal the 2025 COLA figure. However, it is possible to have an idea of the amounts retirees, SSI, and SSDI beneficiaries will have in just a few months.
The payment amounts that these Social Security, SSDI, and SSI recipients may have could be increased by about 2.5%. Even if you think this is a small COLA boost, it is much higher than many other previous cost-of-living adjustments. But it is true that much lower than in 2023 since it was 8.7%.
Expected amounts after the 2025 COLA for:
- SSI benefits (for people with a disability, blind people, and seniors 65 or older with a low income)
- SSDI (disability benefits)
- Payment worth $472 (SSI essential persons) could increase up to $483 with a 2.5% COLA boost
- Payment worth $943 (SSI individuals) could increase up to $966 with a 2.5% Cost of Living Adjustment
- Payment worth $1,415 (SSI couples) could increase up to $1,450 with a 2.5% Cost of Living Adjustment
- Payment worth $1,539 (SSDI) could increase up to $1,577 with a 2.5% Cost of Living Adjustment
- Payment worth $421 (SSDI spouses) could increase up to $431 with a 2.5% Cost of Living Adjustment
- Payment worth $492 (SSDI children) could increase up to $504 with a 2.5% Cost of Living Adjustment
Expected amounts after the 2025 COLA for:
- Social Security retirement benefits
- Payment worth $1,000 (retirement) could increase up to $1,025 with a 2.5% COLA increase
- Payment worth $2,000 (retirement) could increase up to $2,050 with a 2.5% Cost of Living Adjustment
- Payment worth $3,000 (retirement) could increase up to $3,075 with a 2.5% Cost of Living Adjustment
- Payment worth $4,000 (retirement) could increase up to $4,100 with a 2.5% Cost of Living Adjustment
- Payment worth $4,500 (retirement) could increase up to $4,612 with a 2.5% Cost of Living Adjustment
Do not worry if you have a different payment amount for your Social Security, SSDI, or SSI payment. The 2025 COLA could be about 2.5% according to the Senior Citizens League.
That basically means that for every 100 dollars you receive from the Administration or the Federal Government, you get 2.5 dollars extra per month. So, if your monthly payment were 100 dollars, after the 2025 COLA of 2.5%, it would become 102.5 dollars.
How is the COLA calculated each year and what factors influence it?
The Cost-of-Living Adjustment (COLA) is an annual increase made to Social Security benefits to counteract the effects of inflation. Here are the key factors that influence how the COLA is calculated each year:
The Cost of Living Adjustment (COLA) is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). It measures price changes for a set group of goods and services bought by these workers. The COLA reflects the CPI-W’s percentage increase from the third quarter of last year to this year.
If there is no measurable increase (at least 0.1%) in the CPI-W index from year to year, there will be no COLA. Years with higher inflation generally result in larger COLA increases, while lower inflation leads to smaller or no COLA increases.
Since 1975, Social Security’s benefits have been indexed to the CPI-W. This links increases to the cost of living. Before 1975, Congress had to pass special laws to raise benefits.
The Social Security Administration announces the COLA in October. It is based on the CPI-W data from the third quarter (July, August, September) of the current year, compared to the third quarter of the previous year.