That’s when the 2025 Social Security COLA and what it means for retirees can be announced

If you’re one of the many retirees today who rely on Social Security to make ends meet, you may want to know what your cost of living adjustment (COLA) will be in 2025. The purpose of Social Security COLAs is to help beneficiaries maintain their purchasing power from year to year while inflation drives up the cost of living.

Social Security COLAs are calculated based on changes in inflation that occur in the third quarter of the year. Given that it is already October, one might assume that an official number would be available at this point.

In fact, the Social Security Administration (SSA) cannot announce a 2025 COLA until October 10th. So you’ll have to wait a few more days to find out more about what you can expect from your monthly benefits on New Year’s Day.

There is a reason for the delay

There is a specific index used to measure annual Social Security COLAs: the Consumer Price Index for Urban Wage Earners and Office Workers (CPI-W). CPI-W values ​​are typically released about a week after the end of the month.

At this point we have CPI-W data for July and August, but September is the missing piece of the puzzle. And we won’t have the CPI-W data for September until October 10th, so the SSA can’t make an official announcement until then, and not sooner.

There is a working estimate for next year’s Social Security COLA based on the CPI-W values ​​available to date, which is 2.5%. This number could fluctuate up or down following the release of the September CPI-W. But it’s a number you can use as a starting point.

Even an official COLA announcement won’t give you all the answers

At this point, you don’t have to wait much longer until October 10th. But even if the SSA issues a COLA announcement, you may not know exactly how much your monthly benefit check will increase if you’re enrolled in Medicare.

People who are enrolled in Social Security and Medicare at the same time will have their Part B premiums automatically deducted from their monthly benefits. But while we should hear about a Social Security COLA for 2025 on October 10, Medicare won’t necessarily be ready to announce its standard monthly Part B premium for 2025 at this point.

If Medicare Part B costs increase in 2025, this will impact the COLA applied to Social Security benefits. So you’ll have to wait for the Medicare announcement to find out how much more money you can expect to receive each month.

Say you collect $2,000 a month in Social Security benefits and the COLA is 2.5% next year. If you don’t have Medicare, you can expect this raise to give you an additional $50 each month. But if you Are If you enroll in Medicare and Part B costs go up by $8, that leaves a monthly increase of $42.

There is a silver lining

There’s a good chance that Social Security’s COLA in 2025 will be smaller than that in 2024. But the positive news is that inflation is also cooling. Even though your Social Security check may not increase all that much, you can get some relief by paying less on things like groceries and gas throughout the year.

Once you have all the information to figure out how much your monthly income will increase in 2025, you can evaluate your spending to determine if changes are needed. If saving on bills seems like a difficult thing, try joining the gig economy if you’re worried about running out of money.

The beauty of gig work is that you can do it on your own schedule. And you might find that investing a few hours a week will put a lot more money in your bank account than next year’s Social Security COLA — no matter how large it is.