personal finance : Your Money Personal Finance : Your Money: The key changes that will impact Social Security payments in 2025

Friday, August 2, 2024

The key changes that will impact Social Security payments in 2025

 

social security

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 Lower Cost-of-Living Adjustment (COLA)

The Social Security COLA for 2025 is projected to be around 3%, which is lower than the 3.2% increase in 2024 and significantly below the 8.7% COLA in 2023 . This reduced adjustment is due to easing inflation rates, with certain categories like fuel oil, airline fares, and gasoline seeing notable price declines compared to two years ago .


 Potential Impact on Retirees

A 3% COLA increase may not provide sufficient relief for retirees who are still feeling the effects of high inflation . According to a survey by The Senior Citizens League, 71% of respondents said their rising bills would exceed the 3.2% COLA they received in 2024 . more


 Calculation of COLA

The Social Security COLA calculation is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the current year compared to the previous year . If there is an increase in percentage, it dictates the COLA for the following year .


 Official Announcement

The Social Security Administration will officially announce the 2025 COLA in mid-October, based on CPI-W data from July through September . Until then, the projected COLA remains subject to changes .

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