when will 2025 cola be announced for social security

Sav Ter devian

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30-12-2024

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When Will the 2025 COLA for Social Security Be Announced?

Millions of Americans rely on Social Security benefits, and each year, the anticipation builds for the announcement of the Cost of Living Adjustment (COLA). This adjustment helps ensure that benefits keep pace with inflation, protecting retirees' purchasing power. So, when can we expect the official announcement for the 2025 COLA?

The Social Security Administration (SSA) typically announces the COLA in October. Therefore, the announcement for the 2025 COLA is expected in October 2024.

How is the COLA Calculated?

The COLA is based on the increase in the Consumer Price Index for Wage Earners and Clerical Workers (CPI-W) from the third quarter of the preceding year (July-September) to the third quarter of the current year. The SSA uses the average increase over these two quarters to determine the COLA percentage. A higher inflation rate results in a larger COLA increase.

What Factors Could Influence the 2025 COLA?

Several economic factors could influence the size of the 2025 COLA. These include:

• Inflation Rates: The current rate of inflation and its trajectory throughout the remainder of 2024 will be the primary driver. Higher inflation generally leads to a larger COLA.
• Energy Prices: Fluctuations in energy costs significantly impact the CPI-W, potentially affecting the final COLA calculation.
• Food Prices: The cost of groceries is another major component of the CPI-W, and changes in food prices will play a role.

Where to Find the Official Announcement?

Once the COLA is announced, you'll find the official information on the Social Security Administration's website (ssa.gov). Look for press releases and updates on their news section. You can also sign up for email alerts from the SSA to receive timely notifications about benefit updates.

What Happens After the Announcement?

The increased benefits, reflecting the new COLA, will typically begin with the January 2025 payments. Recipients will see the higher amount reflected in their monthly checks.

In Conclusion:

While the precise percentage for the 2025 COLA remains unknown until the October 2024 announcement, the process is well-established. Keep an eye on the SSA website for official updates and prepare for potential changes in your Social Security benefits starting in January 2025. Understanding the factors that influence the COLA allows beneficiaries to better anticipate and plan for their retirement income.