Great news for Social Security recipients like those on retirement, SSDI, and SSI benefits in the United States. It seems they will be receiving a COLA increase in 2025. However, it is uncertain if things will change in the upcoming months.
Of course, it is not possible to know for sure the exact amount. There seems to be a growing tendency since inflation started at almost 1.8% in January, 2.5% in February and 3% in March. This means retirees will likely get a higher monthly Social Security payment in 2025.
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WHEN WILL SOCIAL SECURITY UNVEILED THE NEW COLA FIGURE?
The Administration will most likely announce the 2025 COLA on October 12, 2024. Just like it did in 2023. Retirement, SSDI, and SSI payments are updated on a daily basis and SSA uses the Consumer Price Index for Urban Wage Earners and Clerical Workers.
Some experts believe that getting a Social Security COLA increase is not that positive. The reason why it may affect seniors is twofold. On the one hand, it implies prices are going up. So, seniors and disability beneficiaries lose buying power.
What is more, it can also make you pay more taxes to the IRS (Internal Revenue Service). If by getting more money from the Administration you are in a higher threshold, you may have to pay income tax. This happens if your combined income is over $25,000 per year (single) or $32,000 (married).
WHAT IS THE LATEST SOCIAL SECURITY COLA PROJECTION?
Since the latest CPI percentages are 1,75%, 2.4%, and 3.5%, experts claim that it could be around 3%. So, Social Security recipients could get a 3% increase thanks to the 2025 COLA next year.
Other experts believe that 2025 COLA could be about 1.8% or even 2% for all Social Security benefits. These figures are very pessimistic and they would imply seniors will not get an average or higher increase. Others believe that using the Consumer Price Index for Urban Wage Earners and Clerical Workers is not accurate.
This is because it does not reflect the needs and expenses of retirees. Undoubtedly, seniors do not need the same things as workers. Housing has gone up by 5.7% and medical expenses by 7.5%. not to mention the fact that transport is more than 10% more expensive.