2025 COLA Increase – Review Expected Changes to Social Security Monthly Amounts

The upcoming year 2025 may bring further financial challenges for retired citizens in the United States. The projected cost-of-living adjustments (COLA) for Social Security benefits were expected to decrease, and recent revisions have made it even lower.

As inflation rates remain high, the purchasing power of Social Security beneficiaries continues to decline, indicating significant difficulties for senior citizens in meeting their financial needs. The Social Security Administration (SSA) offers several payment benefits, including SSI, SSDI, and VA, which are influenced by COLA and inflation rates. For updates on COLA, visit the SSA’s official portal at www.ssa.gov.

Challenges

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Rumors and research indicate that many low-income citizens in the United States are struggling with financial crises, finding it difficult to cover basic living expenses due to rapidly rising inflation rates. The cost-of-living and inflation increases make it challenging for these citizens to afford essential items like food and other necessities.

Government Assistance

To support low-income individuals, the federal government has initiated the COLA Increase 2025. This adjustment aims to provide Social Security benefits that reflect the nation’s cost of living. Eligibility for these benefits is determined by the SSA, and beneficiaries are listed on the official SSA portal.

Fact Check

Rumors and research suggest that the COLA for 2025 might change significantly. The Senior Citizens League (TSCL) has predicted a 2.66% increase in COLA for the next year. If this prediction holds, it would mark the fourth consecutive year of COLA increases. However, the SSA has not yet released official figures.

Expected Increase

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The Senior Citizens League initially projected a 2.6% COLA for 2025, revised downwards due to lower-than-expected inflation in May. According to TSCL statistician Alex Morre, Social Security payment benefits are now expected to receive a 2.6% COLA, consistent with estimates from the SSA’s board of trustees.

Some retired citizens might be disappointed with the 2.6% COLA increase, especially when compared to the 3.2% COLA of the current year and the 8.7% COLA from 2023. This modest increase could exacerbate financial hardships for those already struggling.

Loss of Purchasing Power

The SSA calculates COLA based on inflation changes during the third quarter (July through September), using the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers). The CPI-W monitors price fluctuations based on spending patterns of hourly workers. The COLA for the upcoming year is determined by dividing the CPI-W for the third quarter of the current year by that of the previous year.

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In recent years, Social Security beneficiaries have seen significant increases in their payments due to high COLA rates: 5.9% in 2022, 8.7% in 2023, and 3.2% in 2024. However, with an average COLA of 2.6% over the last two decades, beneficiaries are now facing the prospect of reduced purchasing power in 2025. The April inflation report from the U.S. Bureau of Labor Statistics indicated a 3.4% rise in the CPI-W over the past year, surpassing the Federal Reserve’s target of 2% inflation.

While these increases have provided some relief, the persistent core inflation excluding food and energy costs poses a challenge. The upcoming year may require retirees to brace for reduced purchasing power and financial tightening.

The financial landscape for retired citizens remains uncertain, with the projected COLA for 2025 expected to bring only modest relief amidst ongoing inflation challenges.

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