when will ssa announce 2025 cola increase?

2 min read 30-11-2024

when will ssa announce 2025 cola increase?

The annual Social Security cost of living adjustment (COLA) is a significant event for millions of retirees and beneficiaries. This increase helps to protect the purchasing power of their benefits against inflation. So, when can we expect the Social Security Administration (SSA) to announce the 2025 COLA?

Understanding the COLA Announcement Timeline

The SSA typically announces the COLA increase in October of each year. This announcement reflects the average inflation rate measured from July to September of that same year. The data used comes from the Consumer Price Index for Wage Earners and Clerical Workers (CPI-W), which is calculated by the Bureau of Labor Statistics (BLS).

Therefore, we anticipate the announcement for the 2025 COLA to be made in October 2024.

Factors Affecting the 2025 COLA Calculation

Several factors contribute to the final COLA calculation:

Inflation Rate: The primary driver of the COLA is the inflation rate as measured by the CPI-W. Higher inflation generally leads to a larger COLA increase. Lower inflation results in a smaller, or potentially zero, increase.
Bureau of Labor Statistics (BLS) Data: The BLS is responsible for collecting and analyzing the data used to calculate the CPI-W. Accuracy and timeliness of their data are critical to the COLA announcement process.
CPI-W Methodology: The specific methodology used to calculate the CPI-W can influence the final inflation rate and, subsequently, the COLA adjustment. Any changes to this methodology could impact the 2025 COLA.

How is the COLA Calculated?

The COLA is calculated by comparing the average CPI-W for the third quarter (July-September) of the current year to the average CPI-W for the same period in the prior year. The percentage difference between these averages determines the COLA increase.

For example, if the average CPI-W in July-September 2024 is 3% higher than the average CPI-W for the same period in 2023, the 2025 COLA would be approximately 3%.

Where to Find the Official Announcement

Once the official announcement is made, you can find the information on the Social Security Administration's website (ssa.gov). Look for press releases and official announcements regarding the COLA for the upcoming year. You can also sign up for email alerts from the SSA to receive timely updates.

What to Expect After the Announcement

Following the October announcement, the SSA will provide additional details on how the COLA will impact benefit payments. This includes information on the new benefit amounts for retirees, survivors, and disability beneficiaries. The increased benefits will typically begin with payments in January of the following year. Therefore, expect the increased 2025 benefits to start in January 2025.

Looking Ahead to 2025

While we await the official announcement in October 2024, it's crucial to remember that the COLA calculation is subject to change based on the economic climate and the final CPI-W data. Stay informed by regularly checking the SSA website and reputable news sources for the most accurate and up-to-date information. Keep checking back as we get closer to October 2024 for more details on the 2025 COLA increase.