Projected 2025 COLA Increase: Potential Rise in Disability Income

Mary Johnson predicts a 3% increase in COLA payments for seniors, survivors, and individuals with disabilities in 2025, slightly down from her May estimate of 3.2%.

Projected 2025 COLA Increase: According to a recent report, Mary Johnson, a Social Security and Medicare analyst, predicts that the Cost of Living Adjustment (COLA) for Social Security benefits will be reduced in 2025. She now anticipates a 3% increase in payments for seniors, survivors, and individuals with disabilities, a minor decrease from her May estimate of 3.2 percent.

Johnson’s assessment of 2025 is supported by additional experts. Alex Moore, a representative of The Senior Citizens League (TSCL) and Blacksmith Professional Services, observed that their COLA prediction has decreased from 2.66 percent to 2.57 percent.

Meanwhile, CalculatedRisk, a financial blog, anticipates that the 2025 COLA will be between 2.5 and 3 percent, the lowest increase since the 1.3 percent increase in 2021. 2.5 percent is the prediction of the Congressional Budget Office, which is even lower.

The Social Security Administration will disclose the official 2025 COLA rate in October. These projections indicate that Social Security claimants may experience a less substantial increase in their benefits than in previous years. This information is crucial for recipients to consider when developing their financial plans.

Individuals may wish to investigate alternative financial strategies, such as investigating the advantages of a High-Yield Savings Account versus a Certificate of Deposit (CD) for short-term investments, in light of these anticipated modifications.

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Experts anticipate a more modest adjustment

It is imperative to remain informed about these developments, as COLA predictions are subject to change. For example, in May, an average Social Security benefit of $1,916.63 was received by 51 million retired-worker beneficiaries, resulting in an annual average of $23,000. While this may not appear to be a substantial sum, it is a critical source of income for numerous retirees. According to a Gallup poll, the Social Security dividend is a “major” or “minor” source of income for 80% to 90% of retirees, emphasizing its significance in addressing daily expenses.

The annual COLA is avidly anticipated by Social Security beneficiaries, as it enables them to preserve their purchasing power in the face of increasing costs. According to The Motley Fool, “If you were to put together a basket of all the goods and services seniors regularly buy, and the price to purchase these collective goods and services increases, benefits should, ideally, rise by a commensurate amount to ensure no loss of purchasing power.”

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