According to the latest data released by inflation, it is now projected that Social Security beneficiaries could expect an increase of 2.63% by 2025, as indicated by the Senior Citizens League, a non-partisan group that publishes a monthly estimate of the annual cost of living adjustment (COLA), that forecast of 2.63% is a very small increase with reference to last month’s prediction, which was 2.57%, according to a statement they had issued.
The federal data that were published on Thursday indicate that the general inflation was minimized to 3% for the month of July, but the COLA calculations are based on a metric that is called consumer price index for urban wage earners and administrative employees, or CPI-W, for the month of July, the CPI-W was 2.9% year-on-year.
Latest Predictions of the Social Security Cost of Living Adjustment for 2025
The official and definitive cost of living adjustment for the year 2025 will not be announced until the month of October, so the variations in these projections are very normal and are closely watched, given that approximately 68 million Americans have Social Security payments, the estimates not only vary from month to month, but also from one expert to another.
Mary Johnson, an independent analyst of social security and Medicare policies, who retired earlier this year from the Senior Citizens League, indicated that she forecasts a COLA of 2.7% for the year 2025, based on the latest figures released by inflation, this represents a drop from the previous month, when Johnson predicted a COLA of 3%.
In an email that was sent on Thursday, he also pointed out that the “persistently high prices” of certain categories of goods and services that are normally purchased by older, retired or disabled Americans are “causing distress”, such is the case of food prices have increased by 2.2% compared to the previous year and those of housing have increased by 5.2% essentially, the cost of hospital services has increased by 7.1% and the cost of home care for the elderly has increased by a large 11.4% compared to last year.
The Senior Citizens League expressed a similar concern, stating in a letter that “while the decrease in inflation should relieve older consumers, the rapid increase in food prices that we have seen so far in the 2020s means that financial relief is still a long way off.”
When Will COLA 2025 Be Officially Announced?
The Social Security Administration will calculate the official COLA by taking the average inflation rate during the month of July, August and September of this year and comparing it with that average of the year 2023, the difference will be the benefit adjustment.
That means that this month’s inflation data will be the first to have a direct impact on the COLA of the year 2025, in terms of a specific date, the announcement of the COLA usually occurs on the same day that the Bureau of Labor Statistics makes the publication of its September inflation figures, this year it should be published on October 10th.