COLA Increase SSDI 2025: Social Security and Medicare analyst Mary Johnson thinks the Cost of Living Adjustment (COLA) for Social Security payments will be lower in 2025, according to a recent news story.
Table of Contents
The amount seniors, orphans, and disabled people get will go up by 3%, which is less than the 3.2% she thought in May.
In addition to Johnson, Alex Moore from Blacksmith Professional Services and The Senior Citizens League (TSCL) thinks 2025 will be a bad year.
CalculatedRisk predicts the 2025 COLA will be between 2.5 and 3 percent, the smallest bump since 2021’s 1.3 percent.
Also Read: Extended Repayment Plans for Student Loans: Eligibility, Advantages And Disadvantages of This Plan
A lower prediction of 2.5 percent is offered by the Congressional Budget Office.
A COLA rate for 2025 will be announced by the Social Security Administration in October.
According to these projections, Social Security recipients may see a smaller increase in their benefits than in previous years, which is essential to consider when planning their finances.
A short-term investment strategy that compares the benefits of a Certificate of Deposit and a High-Yield Savings Account might be useful given these anticipated changes.
Also Read: 2025 VA Disability Rates: What are the Chances For COLA Increase?
COLA Increase SSDI 2025: A smaller adjustment is expected by experts
It’s important to keep up with these changes because COLA forecasts can change.
As an example, the average Social Security check for 51 million retired workers in May was $1,916.63. This adds up to $23,000 a year.
Social Security’s 2025 benefit bump may not offer much relief for older Americans feeling the strain from high inflation. The projected cost-of-living adjustment of 2.66% would be the lowest increase since the pandemic.
More: https://t.co/xxocRxZpGC pic.twitter.com/YmtJpbOTDu
— NewsNation (@NewsNation) May 30, 2024
This may not seem like much, but for many retirees, it’s a very important source of income.
A Gallup study found that between 80% and 90% of retirees depend on their Social Security payment as a “major” or “minor” source of income. This shows how important it is for paying for daily costs.
Also Read: COLA Increase 2025 Predictions: Social Security benefit is going up by 2.6%
Social Security recipients look forward to the annual COLA because it helps them keep their spending power even though prices are going up.
The Motley Fool says, “If you were to put together a basket of all the goods and services seniors regularly buy, and the price to purchase these collective goods and services increases, benefits should, ideally, rise by a commensurate amount to ensure no loss of purchasing power.”
Congress used to decide on COLAs randomly until 1975, when automatic yearly adjustments were put in place. This gave retirees a more stable and predictable income.
Also Read: FAFSA Deadline 2024: When is the last day to make changes to your application?
