This is exactly when the 2025 Social Security COLA may be announced and what it means for retirees

If you’re among the many retirees today who rely on Social Security to get by, then you may be anxious to find out what the cost-of-living adjustment (COLA) will be in 2025. The Purpose of the Security COLA social welfare is to help beneficiaries maintain their purchasing power from year to year as inflation increases the cost of living.

Social Security COLAs are calculated based on changes in inflation that occur during the third quarter of the year. Considering it’s already October, you’d think an official number would be available by now.

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In fact, the Social Security Administration (SSA) will not be able to announce a 2025 COLA until October 10th. So you’ll have to sit tight for a few more days to find out more about what to expect from your monthly benefits in the New Year.

There is a reason for the restraint

There is a specific index that is used to measure annual Social Security COLAs: the Consumer Price Index for Urban Wage and Service Workers (CPI-W). CPI-W readings are usually released about a week after the end of each month.

Right now, we have CPI-W data for July and August, but September is the missing piece of the puzzle. And we won’t have CPI-W data for September until October 10th, so that’s when the SSA will be able to make an official announcement, and not sooner.

There is a working estimate of next year’s Social Security COLA, based on the CPI-W readings that are available to date, and it is 2.5%. This number could move up or down once September’s CPI-W is released. 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 once the SSA publishes 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 have their Part B premiums automatically deducted from their monthly benefits. But while we should hear about a 2025 Social Security COLA on October 10, Medicare won’t necessarily be ready to announce its standard monthly Part B premium for 2025 until then.

If the cost of Medicare Part B increases in 2025, it will eat up any COLA that applies to Social Security benefits. So you’ll have to wait for Medicare’s announcement to figure out how much more money to expect each month.

For example, let’s say you collect $2,000 a month from Social Security and next year’s COLA ends up being 2.5%. If you’re not enrolled in Medicare, you can expect the increase to put an extra $50 in your pocket each month. But if you i am enrolled in Medicare and the cost of Part B increases by $8, you will be left with a monthly increase of $42.

There is a silver lining

There is a good chance that the Social Security COLA in 2025 will be lower than in 2024. But the positive news there is that inflation is also cooling. While your Social Security check may not grow as much, you may get relief by paying less for things like groceries and gas throughout the year.

Once you get all the information to find out how much your monthly income will increase in 2025, you can assess your expenses to see if changes are needed. If cutting your bills seems like a difficult thing to do, look into joining the gig economy if you’re worried that money will be tight.

The nice thing about gig work is that you can do it on your own schedule. And you may find that investing a few hours a week puts a lot more money in your bank account than next year’s Social Security COLA — whatever that means.