Social Security confirms a check increase for 2024 – Full details of the announcement date

After months of waiting and speculation, Social Security beneficiaries are eagerly anticipating the official announcement of the 2025 cost-of-living adjustment (COLA). This annual increase is designed to help retirees and other recipients keep pace with rising living costs.

The Social Security Administration (SSA) recently confirmed the date when the new COLA will be announced, and beneficiaries are now wondering how much their monthly checks will increase.

For the 70 million Americans who receive Social Security benefits, the 2025 COLA is projected to be one of the smallest increases in recent years, following a notable drop from previous years’ high adjustments. Here’s a look at what to expect, how the COLA is calculated, and some proposed changes to the way it’s determined.

Adjustment

The Social Security COLA for 2025 is expected to be around 2.5%, according to the Senior Citizens League (TSCL). This would be the lowest increase since 2020, when beneficiaries saw just a 1.3% adjustment. While a 2.5% increase may seem small compared to recent years, it’s still close to the average COLA of 2.6% over the past two decades.

For example, in 2024, the COLA was 3.2%, which was already a significant drop from the 8.7% adjustment in 2023—the largest increase in 40 years. The reason for the smaller projected increase in 2025 is the decline in inflation, which has moderated after the pandemic-induced spikes seen in 2022 and 2023.

Here’s how the 2.5% COLA might impact Social Security checks starting in January 2025:

Retirement Benefits	Social Security Check	2.5% COLA Increase
Average Retiree	$1,900	$1,949
Age 62	$2,710	$2,780
Age 67	$3,822	$3,920
Age 70	$4,873	$4,998

Though modest, this increase ensures that monthly payments continue to grow, albeit at a slower pace.

Calculation

The annual COLA is determined based on inflation data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This index tracks the prices of goods and services that affect wage earners and clerical workers, but it’s also used to adjust Social Security benefits.

The calculation for the 2025 COLA will be based on third-quarter CPI-W data from July, August, and September 2024. The SSA will compare these figures to the third-quarter average from the previous year to determine the percentage change. The difference in these inflation figures becomes the COLA rate for the following year. Beneficiaries will know the final adjustment amount by October.

Changes

One of the criticisms of the current method for calculating the COLA is that it may not accurately reflect the costs seniors face, particularly in areas such as healthcare, housing, and food. Currently, the CPI-W is used to determine the COLA, but this index doesn’t specifically track the spending habits of seniors.

To address this issue, the “Boosting Benefits and COLAs for Seniors Act” has been proposed. This federal legislation would change the way COLA is calculated, using the Consumer Price Index for Americans aged 62 and older (CPI-E) instead of the CPI-W.

The CPI-E focuses more on expenses that disproportionately impact seniors, such as healthcare and housing, providing a more accurate reflection of their actual cost of living.

Supporters of this bill argue that the CPI-W underestimates the financial pressures on seniors, resulting in lower-than-needed COLA increases. Organizations like the American Federation of State, County, and Municipal Employees (AFSCME) and the Alliance for Retired Americans support the change, as they believe it would help seniors maintain their financial stability by ensuring that Social Security benefits keep up with the rising costs they face.

Advocacy

There has been a strong push from senior advocacy groups, such as the Senior Citizens League, to secure higher COLA increases to ensure that retirees can live with dignity. According to the TSCL, about 28% of seniors are entirely dependent on Social Security for their income, and nearly two-thirds rely on it for over half of their monthly income.

This heavy reliance makes the COLA a critical factor in their financial well-being. Without adequate increases, retirees may struggle to afford basic needs, especially as inflation continues to impact essential expenses like healthcare and housing.

Impact

For millions of Americans, the 2025 COLA will play a crucial role in determining how much money they have to live on each month. Although the expected 2.5% increase may seem small, it reflects a larger trend of easing inflation.

However, the modest adjustment still leaves many seniors vulnerable to rising costs, especially if their spending is concentrated in areas where inflation remains high, such as healthcare.

Advocates will continue to push for more significant changes to the COLA calculation method, arguing that the current system does not accurately reflect the financial challenges seniors face. Whether or not these changes come to pass, retirees must prepare for smaller COLA increases in the near future, while investigating other ways to supplement their income.

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