Veterans and Social Security recipients may face a slight increase in their benefits next year. After larger increases in the previous years, it may be a disappointment.
Beneficiaries of Social Security direct deposits and veterans benefits payouts might see a cost-of-living adjustment (COLA) of less than 3% in 2025. This would be the lowest increase since before the COVID-19 pandemic, as projected by an independent watchdog group.
Veterans will still get more money
Last week, officials from the Senior Citizens League—an affiliate of TREA: The Enlisted Association—announced their latest projection for the upcoming year’s Social Security COLA rates. They estimate the adjustment will be less than 2.6%.
In their announcement, the group emphasized that this figure is “substantially lower” than the 3.2% adjustment implemented at the start of 2024. The cost-of-living adjustment rate hasn’t been below 3% since early 2020, when it was just 1.3%.
Given these projections, many recipients may find the upcoming year’s adjustment insufficient to keep pace with rising costs.
Every year, in early October, Social Security officials reveal their cost-of-living adjustments for the upcoming calendar year. This announcement is eagerly anticipated by many, as it directly impacts the financial well-being of numerous individuals.
Estimations by the Senior Citizens League
In recent years, the estimates released by the Senior Citizens League in late summer have proven to be remarkably accurate, often coming within a percentage point of the official adjustment figures. This predictive accuracy offers a useful preview of what to expect.
Impact on Veterans
The annual Social Security announcement holds particular significance for vets. This is because Congress links the increase in veterans’ payouts to the Social Security Administration’s calculations.
Who Benefits?
Approximately 5 million vets and 2 million military retirees receive monthly benefits checks through the Department of Veterans Affairs. The cost-of-living adjustment (COLA) increase affects various payouts, including:
- Disability compensation
- Clothing allowances
- Dependency and indemnity benefits
- Other Veterans Affairs assistance programs
Understanding these adjustments is crucial for those relying on these benefits, as it directly influences their financial planning and stability.
For a veteran obtaining 1,500 dollars per month in disability payouts, a cost-of-living adjustment of 2.6% would mean an extra $39 each month. However, in 2023, that figure soared to 8.7%, or about $130 a month for that same veteran.
Understanding Cost-of-Living Adjustments
Social Security officials calculate the annual cost-of-living adjustment based on the Consumer Price Index for Urban Wage Earners and Clerical Workers. If those laborers don’t see a rise in their annual salaries, federal planners can determine that no adjustment is needed.
The Impact on Veterans and Seniors
However, officials from the Senior Citizens League have highlighted that the government’s “failure to return inflation to pre-pandemic levels” has put additional pressure on seniors and veterans benefits recipients. This makes the size of the adjustment crucial for the financial health of many households.
- Veterans: The increased adjustment helps veterans cope with rising living costs.
- Seniors: Many seniors rely heavily on these adjustments for their monthly budgets.
