When Will the Social Security 2025 COLA be Announced?
The Social Security Administration’s cost of living adjustment (COLA) announcement each October is greatly anticipated by the 68 million retirees who receive monthly benefits. The latest 2025 COLA forecast is 2.5%, a slight decrease from last month’s estimate of 2.6%.
The calculated COLA will be applied to Social Security checks starting in January. This happens every year, although the payment may occasionally arrive a few days early due to holidays or weekends.
When will the 2025 COLA be announced?
The official Social Security COLA for 2025 is scheduled to be announced on October 10 at 8:30 am ET. One place you can monitor for the new COLA announcement is the SSA’s Communications Corner.
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The Social Security Administration takes the average of the CPI-W for July, August, and September of the current year and the previous year to calculate the annual COLA. It then divides the difference by the previous year’s average.
The Bureau of Labor Statistics will compute the 2025 COLA using the same methodology, but it must wait until it receives the September 2024 CPI-W number. You can easily locate the specific CPI-W data you need to do the calculations on the SSA’s website.
How the COLA is computed: CPI-W data for 2022 and 2023 were averaged to arrive at the 3.2% COLA for 2024. The SSA website provides a concise and easy to follow explanation of how to crunch the COLA number: The average CPI-W for the third quarter of 2023 is 301.236. Because this average exceeds 291.901 by 3.2%, the COLA effective for December 2023 is 3.2%. The COLA calculation, with the result rounded to the nearest one-tenth of 1% is: (301.236 – 291.901) / 291.901 x 100 = 3.2%.
Month | CPI-W 2022 | CPI-W 2023 | CPI-W 2023 |
---|---|---|---|
July | 292.219 | 299.899 | 308.501 |
August | 291.629 | 301.551 | 308.640 |
September | 302.257 | 302.257 | TBD |
Total | 875.702 | 903.707 | TBD |
Average (rounded to the nearest 0.001) | 291.901 | 301.236 | ? |
Social Security trustees project wage base for 2025
Social Security caps the amount of income you pay taxes on and get credit for when benefits are calculated. The Social Security tax limit for 2025 is projected to be $174,900 in 2025 based on the “intermediate” projections from the 2024 Board of Trustees of the Social Security Trust Fund report.
In 2024, the wage base was capped at $168,600 and is indexed annually for inflation. If you make more than $168,600 in 2025, you can expect a higher Social Security tax bill next year once this limit is increased.
In 2023, the wage cap was $160,200, and it rose by $8,400 to $168,600 in 2024. This was a smaller increase than the jump from 2022 to 2023, when the cap increased by $13,200.