Social Security Check Increase Through 2025 – COLA Update, and Final Announcement Date

For millions of retirees relying on Social Security checks to cover daily living expenses, the announcement of the annual cost-of-living adjustment (COLA) is a critical moment. The COLA is designed to offset inflation, ensuring that retirees can maintain their purchasing power as prices rise. However, with inflation cooling off after record highs, the projected increase for 2025 may be lower than expected, causing concern among retirees.

The Senior Citizens League has predicted a 2.63% COLA for 2025, but many retirees fear this adjustment won’t keep up with inflationary pressures. While the official estimate from the Social Security Administration (SSA) will be released in October, the COLA may not significantly ease the financial strain retirees are currently facing.

What Is COLA?

The cost-of-living adjustment (COLA) is an increase in benefits tied to inflation, helping recipients, like retirees, keep pace with rising costs. Inflation is measured by the Consumer Price Index (CPI), and for Social Security, the CPI for Urban Wage Earners and Clerical Workers (CPI-W) is used. The purpose of the COLA is to adjust benefits in response to inflation, ensuring that retirees don’t lose purchasing power over time. This is particularly important for those living on fixed incomes who might otherwise struggle as prices for essentials rise.

The COLA for 2025 will be based on the average inflation rate from the third quarter of 2024 (July, August, and September). While inflation has been declining, recent months have seen a slight uptick, influencing the projections for next year’s COLA.

Increases for 2025

If the 2.63% COLA prediction becomes official in October, retirees will see their Social Security checks increase in January 2025. However, this figure is just an estimate, and the actual percentage could fluctuate as inflation data for the third quarter comes in. Here’s what a 2.63% COLA would look like for different beneficiaries:

Retirement Age	Current Benefit	2025 Benefit (with 2.63% COLA)
Average Retiree	$1,900	$1,950
Age 62	$2,710	$2,781
Age 67	$3,822	$3,923
Age 70	$4,873	$5,001

While these increases are helpful, many retirees worry that a 2.63% boost won’t be enough to combat the rising costs of housing, healthcare, and other essentials. In comparison, the COLA was a massive 8.7% in 2023 when inflation was sky-high, and a more modest 3.2% in 2024 as inflation cooled.

Early Payments

Retirees can expect to see the COLA adjustment reflected in their Social Security checks starting in January 2025. However, for those who receive Supplemental Security Income (SSI), the timing will be different. Since January 1st is a holiday, SSI recipients will receive their first COLA-adjusted payment on December 31st, 2024. This early payment ensures that beneficiaries won’t experience any delays due to the holiday.

Additionally, some SSI recipients will benefit from another upcoming change. Starting on September 30, 2024, the SSA will no longer factor in food when calculating In-Kind Support and Maintenance (ISM). This change will result in higher payments for many SSI beneficiaries, as food assistance will no longer reduce their eligibility or benefit amounts.

Not Be Enough

While the COLA is intended to help retirees keep up with inflation, many argue that it doesn’t fully reflect the actual expenses retirees face. Medical costs, housing, and utilities have been rising faster than general inflation, and these are the areas where retirees often spend the most. Even a 2.63% increase may fall short of covering these rising expenses.

Additionally, the COLA only applies to Social Security benefits, not other forms of retirement income, such as pensions or personal savings. With many retirees also relying on these sources, the COLA alone may not be sufficient to maintain their standard of living, especially for those with limited savings.

Future Reforms for SSI

The SSA has already implemented some changes to make SSI benefits more accessible. As mentioned, the removal of food from the ISM calculation is a significant step toward ensuring that the most vulnerable populations receive the full benefits they’re entitled to. This change is part of a broader effort to reform the SSI program and make it more equitable.

Looking ahead, further reforms may be necessary to ensure that Social Security remains sustainable for future generations. While the COLA is a helpful adjustment, it may not be enough on its own to solve the financial challenges facing retirees in the years to come.

The 2025 COLA, while providing some relief, underscores the need for a more comprehensive approach to addressing the financial well-being of retirees. As inflation continues to impact the cost of living, ensuring that Social Security benefits keep pace with these changes is crucial for millions of Americans.

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