Social Security benefits are the primary income for millions of Americans. Approximately one out of every five citizens receives some kind of benefit from the Social Security Administration (SSA) every month.
Living costs are rising, inflation is having an effect, and the world is in a complicated moment: states are oblivious to global realities and the cost of living has been hit in recent years, especially after the pandemic and with ongoing global events.
COLA Increments Come Into Play
That’s why the cost of living adjustment, known as COLA, represents a tool not only for the Social Security Administration (SSA) but for other entities that grant payments to people at risk, to cope with inflation and ensure that those who receive these payments do not lose purchasing power.
Inflation can eat up your income like a hungry shark, and what you can do is little. What you buy today with $100 will cost a lot more money a year from now if the cost of living continues to rise at the rate it has in recent years.
It is likely that a less strong COLA adjustment will be applied than the one in 2023, which was 8.7%, and it will look much more like the one in 2024, which was 3.2%. However, some estimate that the COLA adjustment for 2025 will not keep pace with inflation, leaving retirees and all SSA beneficiaries at risk of losing purchasing power. Basically, this tool would fail in its main purpose.
How Much Will Social Security Benefits Increase in 2025?
The Bureau of Labor Statistics is expected to release its latest consumer price index (CPI) report for May next week, which will give seniors more information on how much their benefits could increase in 2025. It won’t show the final TAIL adjustment yet, but it will be able to give an overview of what to expect when that final number is presented.
This year, the SSA offered retirees and other beneficiaries of its programs a 3.2% increase, based on changes in the price level tracked by the Consumer Price Index for Urban Wage Earners and Office Workers (CPI-W).
The Senior Citizens League (SCL), a non-profit organization that advocates for the rights of older adults to a dignified and economically sustainable life, has published its latest forecast for the year 2025.
This organization expects the increase in the COLA adjustment to be only 2.6%. It is very similar to the inflationary forecast that the International Monetary Fund has for that year in the United States, which is 2.3%. For its part, the Organization for Economic Cooperation and Development (OECD) projects a number of 2.45%.
For its part, the Bank of America expects inflation to be 2.8%, while Goldman Sachs forecasts an inflation rate of 2.7%. Morgan Stanley is even more pessimistic and believes that the cost of living in the United States will grow by 3% in the next year. If any of these last three scenarios materialize, retirees will have effectively lost purchasing power.
When Will I Receive My Social Security Benefit Payments in June?
Three Social Security payments arrive with the COLA increase of 3.2% in 2024. As usual and by SSA rule, the benefits of retirees and those who receive Social Security Disability Insurance (SSDI) are made on the second, third and fourth Wednesday of each month. However, in the month of June you will find a peculiarity, since the third Wednesday is celebrated the Emancipation Day, known as Juneteenth. That is why the payment corresponding to that day will be advanced one day.
With that change, the schedule for these three remaining payments during the month of June is as follows:
- Wednesday, June 12th: Beneficiaries with date of birth between 1st and 10th.
- Tuesday, June 18th: Beneficiaries with date of birth between the 11th and the 20th (Attention: Prepayment due to the Juneteenth Day holiday on June 19th).
- Wednesday, June 26th: Beneficiaries with date of birth between 21st and 31st.
And these are the next payments for the month of July 2024:
- Monday, July 1st: Supplemental Security Income (SSI).
- Wednesday, July 3: If you received Social Security before May 1997 or if you receive both Social Security and SSI (Social Security is paid on July 3 and SSI on July 1).
- Wednesday, July 17th: Beneficiaries with date of birth between 1st and 10th.
- Wednesday, July 24th: Beneficiaries with date of birth between 11th and 20th.
- Wednesday, July 31st: Beneficiaries with date of birth between 21st and 31st.
