When there is inflation, Social Security benefits increase, which may have an impact on seniors’ and other recipients’ spending power. In this way, SSDI, SSI, and retirement benefits can keep up with the rising cost of living.
This year’s cost-of-living adjustment increase, or COLA, may be lower than past years. That is good because it means costs haven’t risen as much, but it’s bad since beneficiaries receive less money from Social Security.
What additional drawbacks may result in a greater Social Security COLA increase?
Aside from having to deal with rising expenses, a larger COLA for Social Security may require some seniors to pay taxes. There is no need to worry if you do not have any other sources of income.
However, if you get Social Security and have other sources of income, you may fall under a separate threshold. Exceeding this limit may require you to pay additional taxes.
So, your benefits may be diminished. Low-income recipients would benefit greatly from a bigger COLA increase because their benefits may not be reduced. Getting more money may also mean you are ineligible for other assistance such as SNAP or SSI. But what is the newest COLA projection?
Social Security 2025 COLA prediction
Since the administration will not reveal the 2025 COLA until October 10, recipients must rely on projections from specialists such as the Senior Citizens League.
This week, the Senior Citizens League announced a fresh COLA prediction that is lower than projected. It’s dropped to 2.5%. So, if your retirement, SSDI, or SSI payment is worth $1,000, it will only be $1,025.
As of August 14, the Senior Citizens League projected 2.57%, down from 2.63%. As a result, retirees and other Social Security beneficiaries are unlikely to get a higher COLA than in 2023 or 2022.
Keep in mind that a 2.57% rise implies you’ll get 2.57 dollars more for every 100 dollars you receive from the administration. For example, a $1,000 check would be worth $1,025.7.