We are one day away from the Social Security COLA 2025 announcement. Here’s what to expect.

The day the seniors have been waiting for is near. On October 10, the Social Security Administration (SSA) will be able to announce an official cost of living adjustment (COLA) for 2025. There has been a lot of speculation about that COLA in recent months, so it will be nice to finally put an end to it guessing game and gives seniors a clear answer.

But tomorrow’s news shouldn’t come as a complete surprise either. And at the same time, tomorrow’s news may be incomplete. Here’s what you need to know as we prepare for what could be the most important Social Security day of the year.

Image source: Getty Images.

A lower COLA is likely due to easing inflation

In 2024, Social Security benefits increased by 3.2% after a year of fairly notable inflation. But inflation has cooled since early 2024, so next year’s COLA is likely to be less than the raise that was awarded earlier this year.

Initial estimates call for a COLA of 2.5% in 2025. But the final number could be slightly lower.

The good news is that 2025 is not expected to be a 0% COLA year — something that has happened several times in the past. But it is important to prepare for a smaller increase than in recent years.

That said, since Social Security COLAs are tied to inflation, a lower one isn’t automatically a bad thing. If anything, it’s a sign that relief may be in store in the form of lower prices for essentials like food and gas.

A key point of information may not be available yet

Once the SSA announces a COLA, you might rush to grab a calculator and apply that percentage to your current monthly benefit to see how much money you’re still in line for in 2025. But not so fast. If you’re enrolled in Medicare, you’ll need one more piece of the puzzle to determine how much your monthly income actually increases.

Seniors who are enrolled in Social Security and Medicare at the same time have the cost of Part B premiums automatically deducted from their monthly benefits. But if the cost of Part B goes up in 2025, which is quite likely, it could affect your Social Security increase. So, until you have this information from Medicare, you can’t make concrete plans with your COLA.

The news comes soon enough

There’s no doubt that tomorrow’s Social Security announcement will be a big one. In addition to an official COLA, the SSA is expected to announce a number of key changes including the 2025 earnings test limit (which applies to people who are working and collecting benefits at the same time), the wage cap for Social Security taxes, and work . credit earning requirement.

Check the news section of the SSA website for all the details about these important updates in 2025. But remember, if you’re on Medicare, you may not yet have all the information you need to process your COLA news.