Social Security Prediction: This will be the COLA number announced on October 10th

Retirees who rely on Social Security payments should mark an important date on their calendars this year – October 10.

This is the day the Social Security Administration (SSA) is expected to announce the annual cost of living adjustment (COLA) for 2025. All indications are from experts that retirees will see a 2.5% COLA for 2025although this could change based on September’s inflation reading. However, the 2025 COLA is expected to be lower than the 3.2% increase received in early 2024.

Of course, experts’ predictions of where the final increase in the cost of living will come from are based on a number of factors that are in flux, and the number could be significantly higher or lower than the 2.5% estimate, depending on how in which we see inflation data will be out in the coming days.

Here’s what investors might want to consider when it comes to this data, and what it could portend for next year’s budget.

Key points about this article:

• Retirees looking to budget for their next tax year certainly have a number of key factors to consider.
• One of the biggest factors that will help budget for next year’s spending is the upcoming COLA, which is expected on October 10th.
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COLA predictions

With us now less than two weeks away from seeing what the next cost-of-living adjustment will be for seniors, the tense build-up to this announcement is certainly palpable for millions of Americans.

That being said, the bottom line most experts have come to is that a lower inflation is expected to result in a modest 2.5% cost-of-living adjustment (COLA) for Social Security benefits in 2025. This would mark the smallest increase in three years and is based on an estimate of data on August and July inflation. , with confirmation of September inflation figures to come. The Social Security Administration will announce the official COLA after the September CPI is released on October 10. So October 10th may not be the exact day we will know for sure, but market participants will surely come to a conclusion by then

Although modest compared to the 8.7% increase in 2023, a 2.5% increase remains crucial for seniors who want to cope with the rising costs of health care, food and housing. For example, a retired worker earning about $1,920 a month in 2024 would see an increase of about $48 in 2025, bringing their benefit to about $1,968. Similarly, survivor benefits averaging $1,509 would increase by about $38 monthly, providing additional support to families.

Organizations like The Senior Citizens League continue to advocate for a COLA minimum 3%pointing out that many seniors rely heavily on Social Security for their income.

Should retirees worry?

A woman looking worried

Consumers often dislike the term “inflation,” especially since it highlights how much a dollar can buy compared to previous years. While inflation is generally preferred over deflation from an economic perspective, its impact can be significant. This is especially true for those on fixed incomes, such as Social Security recipients. Fortunately, Social Security’s cost-of-living adjustments are designed to help mitigate some of the effects of inflation.

However, a The projected COLA of 2.5% would mark the smallest adjustment since 2021, so there are plenty of seniors calling for Congress to pass legislation to tie this increase to other macroeconomic factors. Personally, I think this may be feasible and reasonable, but given the size of the deficit and the growing demands for fiscal austerity, such measures may be in the offing.

Higher inflation is not a good thing either. So seniors are really stuck between a rock and a hard place right now. Of course, all of this discussion ultimately ends up in the same place – saving for retirement through a company-sponsored savings plan or on your own is always recommended, for those who don’t want to rely on the government. At some point in life, however, this is not possible for millions of Americans.

conclusion

A dollar bill eroded by inflation

The October 10 announcement will be crucial for millions of Americans who rely on benefits. While the projected 2.5% increase seems modest compared to recent years, it will help offset rising living costs. Beneficiaries need to be informed of these changes in order to plan their finances effectively.

While the 2025 COLA prediction of 2.5% reflects a decrease from previous years, it is in line with long-term averages. The final official announcement will be made by the Social Security Administration in mid-October, after the completion of CPI-W data collection for September.

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