It is predicted that the 2025 Cost-of-Living Adjustment (COLA) for Social Security Disability Insurance (SSDI) will provide a minimal raise, but this may be an ambiguous advantage to the 71 million American beneficiaries. Even though it means a beneficial adjustment for those who are dependent on disability payments, it is likely to be below the 2024 increment of 3.2% and could possibly disappoint many beneficiaries.
What is the projected SSDI COLA increase for 2025
According to the Senior Citizen League, the projected COLA increase for SSDI recipients in 2025 may be at 2.63%. This adjustment is much lower than the 3.2% COLA increase for 2024 and the historic 8.7% jump in 2023 during the high inflation rate. The 2025 projected COLA adjustments show a reduction in inflation. Basically, the decrease in inflation brings down the percentage increase in the annual COLA adjustments but stabilizes price.
How much could SSDI recipients receive in 2025
If you currently receive $1,537 per month as your payment then with the projected 2.63% COLA adjustment, you will only get an extra $40 per month bringing your monthly payment to a total of $1,577 monthly. In 12 months, that is, a year, these adjustments will mean an extra $480 added to your total SSDI payment. Additionally, you need to know that the exact amount of increase will be dependent on an individual’s benefit amount.
Here are some examples:
- Low benefit amounts: If you receive $500 a month, you can expect a payment increase of about $513.
- Higher benefit amounts: For those receiving $2,000 a month, the increase would bring their payment to approximately $2,052.
Despite these COLA improvements, these modifications might not help many beneficiaries with their rising costs of essential items such as food, housing and medical care. However, this increase will offer some relief from the financial strain.
Why is the COLA increase lower this year
The Social Protection Administration (SSA) is responsible for determining COLA adjustments for SSDI while taking into account Consumer price index for urban wage earners and clerical workers (CPI-W). Inflation is measured using this index which tracks prices of typical basket of goods and services bought by urban consumers.
In the past years, inflation soared causing COLA increments to be above or average. For instance, figures were recorded to have risen by 5.9% in 2022 and then a historic 8.7% in 2023 attributing these increases to economic pressures among other things. However COLA adjustments have decreased since inflation levels have started to normalize leading to a projected modest increase of 2.63% in 2025.
It should be noted that the projected figure of 2.63 % is subject to revision before final confirmation, hence it is not yet conclusive. It will be announced officially by SSA in October 2024 based on updated data from CPI-W. The actual amount could still change depending on prevailing economic conditions.
Preparing for the 2025 COLA adjustment
With the average projected increase of 2.63%, SSDI beneficiaries should expect a minimal rise in their allowances next year. Therefore, beneficiaries need to budget wisely. Even if it’s not as great as the previous ones, any increment still comes with some form of monetary consolation.
In order to keep up with current trends, recipients should stay tuned for the official statement from SSA set for October 2024 when the final COLA statistic for 2025 will be unveiled. This information on this adjustment is very important in making your financial plans for next year accurately.
