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    • Answering your top five questions about the 2025 Social Security COLA
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    Answering your top five questions about the 2025 Social Security COLA

    Kathleen William Posted on

    Are you curious about next year's Social Security increase? Here's what you need to know:

    Maurie Backman
    | The colorful fool

    Social Security is an important source of retirement income for millions of retirees. And for those who rely heavily on these benefits to pay their bills, annual raises often mean the difference between being able to make ends meet and financial hardship.

    Each year, Social Security benefits are eligible for a cost of living adjustment (COLA). COLAs are designed to help recipients keep up with inflation so they don't fall behind, as the cost of living naturally increases over time.

    Now that we're approaching 2025, you may want to learn more about next year's Social Security COLA. Here are answers to some of the burning questions you may have.

    1. When will an official COLA be announced?

    Social Security COLAs are calculated based on third quarter inflation data. For this reason, the Social Security Administration (SSA) cannot issue an official COLA until October. And the exact date of a COLA announcement depends on when September inflation data becomes available. This year this data will be published on October 10th.

    2. How much COLA can I expect?

    Social Security COLAs are based on changes in inflation in the months of July, August and September. There is currently no September data, but data is available for July and August. And based on what is known so far, experts are calling for a 2.5% Social Security COLA in 2025.

    However, this number could fluctuate up or down depending on how the official inflation figures for September develop. In any case, however, you should expect the Social Security COLA in 2025 to be lower than the 3.2% increase made at the start of 2024.

    3. When does my COLA take effect?

    At the start of the new year there are COLAs. The first monthly Social Security payment you receive in 2025 is therefore likely to be higher.

    More: Social Security's COLA shrinks to 2.5% for 2025, the smallest increase since 2021

    4. How much will my monthly Social Security check increase after COLA 2025 is applied?

    The extent to which your monthly Social Security payments will increase in 2025 depends on a few factors. These include an official COLA number, whether you are enrolled in Medicare, and whether Part B costs will increase in 2025.

    To give you an idea of ​​what to expect: If you collect $2,000 in Social Security today, a 2.5% COLA would initially increase your monthly benefit by $50. If you are not already enrolled in Medicare, the $50 increase should apply. However, if you're enrolled in Medicare, that means you'll automatically pay your Part B premiums from your Social Security checks. If Part B costs increase by $10 per month in 2025, your increase will be reduced from $50 to $40.

    5. How can I find out about COLA 2025 once details become available?

    As previously mentioned, the SSA will release an official COLA announcement on October 10th. The best thing to do on this day is to first look at the news section of the SSA website. There is a possibility that the update will be made available elsewhere on the site, but the News section is generally the correct source for updates of this type.

    Soon everyone should have more clarity about next year's Social Security COLA. For now, you can use the information above to make financial decisions for 2025 — or at least get a sense of what kind of changes lie ahead.

    The Motley Fool has a disclosure policy.

    The Motley Fool is a content partner of USA TODAY, providing financial news, analysis and commentary designed to help people take control of their financial lives. Content is independently produced by USA TODAY.

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    Kathleen William
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