The increase in Social Security benefits through the Cost of Living Adjustment (COLA) makes it possible for United States citizens to have a little extra money each month. This extra money is not for citizens to flaunt at a higher level of wealth, but to balance annual inflation.
However, not every year we can see an equal Cost of Living Adjustment (COLA) increase in Social Security benefits. Each year has its own inflation rate and, therefore, its own COLA. Depending on how much prices increase, we may find that check payments increase more or less.
How Much Will the Cost of Living Adjustment (COLA) Increase in 2025?
On October 10th, it was announced that the Cost of Living Adjustment (COLA) for Social Security benefits will be 2.5%. Starting in January 2025, United States citizens receiving Social Security checks will see this new COLA increase applied. Therefore, anyone with an approved retirement will be able to receive these extra dollars without any problems.
Since the COLA is 2.5%, this means that each beneficiary will see their monthly payment increase by 2.5% of their current benefit amount. Although this increment may seem small on a monthly basis, when considered over the course of a year, it represents a significant amount for beneficiaries.
When Will We Know the Official Cost of Living Adjustment (COLA) 2025 Figure?
The key month to know all the information about the Cost of Living Adjustment (COLA) is October. On October 10th, it was officially announced that the COLA will be 2.5%. This increase will be applied to Social Security checks starting in January 2025.
Summary of the Update:
- Effective Date of Increase: The COLA adjustment will begin in January 2025.
- Announced Percentage Increase: The COLA was announced on October 10th and is set at 2.5%.
- Key Month for Official Announcement: The official COLA figure was announced on October 10th.
- Determining Factors: The COLA increase was based on the inflation rates for July, August, and September, measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
- Automatic Process: There is no need to apply for the adjustment; it will be applied automatically in the first payment of 2025.
Additionally, it is important to highlight that the crucial data for determining the COLA is the inflation recorded in the months of July, August, and September. Therefore, the increase in the CPI-W during these months was fundamental in establishing the Cost of Living Adjustment.
Furthermore, it is important to remember that the process is automatic, which means that beneficiaries will not need to request the Cost of Living Adjustment (COLA) increase in their Social Security retirement checks at any time. The Administration performed the calculation automatically and applied it to the first payment of 2025.