Social Security COLA Increases: According to predictions, Social Security benefits may increase by 2.57% for the cost-of-living adjustment (COLA) in 2025. Some retirees who get an average payout of $1,480 may receive an additional $47 in 2025.
Estimated COLA for 2025
According to the Detroit Free Press, current estimates indicate a 2.57% COLA hike in 2025, which would enhance payments by around $50 per month. However, according to the Seniors League’s 2024 Loss of Buying Power research, this rise would not be sufficient to cover rising prices for older persons. According to the report, pensioners would need to spend an additional $370 per month to preserve their purchasing power from 2010. This estimate does not take into consideration potential Medicare Part B premium hikes.
How the Social Security COLA Is Determined?
Every year, the COLA is calculated using a certain process. The Social Security Administration compares the percentage change in the consumer price index (CPI) during the third quarter from one year to the next. This information is used in the calculations for the forthcoming COLA. If the CPI is low, it indicates that Americans’ living expenses have not increased considerably in recent months. Higher rates imply increased prices and faster inflation.
What is Social Security COLA?
Social Security benefits have long provided crucial financial support to more than 71 million Americans, including retirees, veterans, and their dependents. The Cost-of-Living Adjustment (COLA) was established in 1973 and has been administered annually since 1975 to help these payments maintain pace with inflation. This change has largely maintained the purchasing power of Social Security payouts from rising costs.
Social Security Current Average Payment
Social Security benefits are contingent upon a number of factors, including length of service, tax burden, and retirement age. The typical payments as of right now are as follows:
- Retired workers: around $1,907 per month.
- Retired couples (filing jointly): Approximately $3,303 per month
- Survivor benefits: An average of $1,509.50 per month
- Spouses of Retired Workers: Average of $910 per month.
- Children of Retired Workers: An average of $892.39 per month
- SSI Beneficiaries (Individuals): Monthly average of $943
- SSI beneficiaries (couples): average of $1,415 per month.
