Survivor Benefits Increase – How Much Will Social Security COLA 2025 Raise Them?

Around 70 million Americans are eagerly awaiting news about their Social Security benefits for 2025. With inflation affecting everyday expenses, retirees and other beneficiaries are keen to find out how much their benefits will increase. The annual cost-of-living adjustment (COLA) ensures that benefits keep pace with inflation, maintaining the purchasing power of millions of Americans.

The Social Security Administration (SSA) is expected to announce the COLA adjustment soon. Let’s cut into what this adjustment entails, when it’s likely to be announced, and how it impacts Social Security and veterans’ benefits.

COLA Explained

The SSA has been adjusting Social Security benefits annually since the 1970s to account for inflation. Known as the cost-of-living adjustment (COLA), this policy prevents beneficiaries from losing purchasing power due to rising prices. Without COLA, the real value of Social Security payments would erode over time, making it harder for recipients to cover basic living costs.

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COLA is determined by changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The CPI-W tracks inflation by monitoring the spending habits of American workers, measuring things like food, housing, medical care, and transportation costs. This data helps ensure that Social Security benefits are adjusted to keep up with inflation.

When to Expect

The big question on everyone’s mind is: When will we know the new COLA? The SSA typically releases the COLA adjustment when the Department of Labor publishes its September inflation data. The release of the September Consumer Price Index (CPI) report is set for Thursday, October 10, 2024, which means the COLA announcement will likely follow shortly afterward.

While the official number is still under wraps, the Senior Citizens League (TSCL), a major advocacy group for older Americans, has estimated that the 2025 COLA will be around 2.5 percent. This would make it the smallest increase since 2021, when the adjustment was just 1.3 percent due to the low inflation caused by the pandemic.

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Comparing COLA Adjustments

Recent years have seen significant fluctuations in COLA due to changing inflation rates. In 2022, beneficiaries saw a large increase of 5.9 percent, and in 2023, the adjustment surged even higher to 8.7 percent as inflation reached historical highs. For 2024, seniors received a 3.2 percent increase, reflecting a moderate inflation rate.

Here’s a quick look at recent COLA increases:

*Projected estimate from the Senior Citizens League.

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The projected 2.5 percent increase for 2025 indicates a slowdown in inflation, but it also reflects the government’s ongoing efforts to help Americans cope with rising prices.

Veterans’ Benefits

Veterans who rely on disability benefits, clothing allowances, and indemnity compensation for surviving spouses and children will also see an increase in their payments in 2025. This change is thanks to the Veterans’ Compensation Cost-of-Living Adjustment Act of 2024, which ties veterans’ benefits to the Social Security COLA.

If the COLA is set at 2.5 percent, as projected, veterans can expect their benefits to rise by the same percentage. This ensures that veterans are not left behind in efforts to keep up with inflation, providing a more secure financial future for those who have served the country.

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Why COLA Matters

Why is COLA such a big deal? The short answer is that it’s crucial for financial security. Social Security benefits represent a major source of income for retirees, disabled workers, and others. Without these annual adjustments, beneficiaries would lose significant purchasing power as the cost of goods and services rise.

COLA helps preserve the value of these payments, protecting seniors and others from the impact of inflation. For example, even a modest COLA increase of 2.5 percent could mean hundreds of extra dollars per year for those on a fixed income.

Moreover, the ripple effect of COLA extends beyond Social Security beneficiaries. Federal programs like veterans’ benefits also adjust based on COLA, ensuring that multiple groups of Americans see a similar boost in their income.

As the official announcement approaches, millions of people will be paying close attention to what the SSA and Department of Labor release in their inflation data. The COLA adjustment represents more than just a number—it’s a lifeline for many Americans trying to keep up with the rising cost of living.

While the projected 2.5 percent increase may seem modest, it’s a reminder of the government’s continued commitment to supporting citizens in an unpredictable economy.

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