(NewsNation) — The Social Security Administration will announce a new cost-of-living adjustment on Oct. 10, 2024, with the increase expected to be smaller than last year.
For 2024, Social Security payments increased 3.2%, but now that inflation has slowed, analysts are predicting a smaller adjustment.
More than a third of retirees say their checks are a major source of income, with nearly 68 million Americans receiving Social Security benefits in 2024.
The Social Security Administration has adjusted benefits each year since 1975, with changes calculated based on inflation and changes to the consumer price index. The COLA is designed to help seniors keep up with rising prices.
Best Prime Day Deals for 2024:
— Products still on sale after Prime Big Deal Days
— Beats headphones and tablets remain marked down
— Make sure you’re stocked with Apple products
BestReviews is reader-supported and may earn an affiliate commission.
The August 2024 Consumer Price Index report showed a 2.5% increase in average prices since the previous year, a sign of cooling inflation.
Following the COVID-19 pandemic, the COLA has been higher in recent years, reaching a maximum of 8.7% in 2023. To keep pace with the Consumer Price Index, the adjustment for 2025 would have to reach a minimum of 2.5%. That’s the amount predicted by analysts.
However, nonprofit Senior Citizens League is advocating for a bigger adjustment.
“Ensuring that seniors have enough to feed and house themselves with dignity is a major reason why we advocate for a minimum COLA of 3%,” said executive director Shannon Benton. “TSCL research shows that approximately two-thirds of seniors rely on Social Security for more than half of their monthly income, and 28% depend on it entirely.”
A 2.5% COLA would mean the average Social Security recipient would get $48 more each month, with the average check coming in at $1,966.
To qualify for retirement benefits through Social Security, people must compile 40 work credits over their lifetime, with a maximum of four credits allowed each year. In 2024, earning four credits required making more than $6,920. That amount is also expected to increase in 2025 and will be announced at the same time as COLA.
It’s also possible that the amount of earnings taxed for Social Security will increase from 2024’s income cap of $168,600.
Social Security recipients will officially be notified of changes to their benefits in September.
