The Cost-of-Living Adjustment (COLA) for Social Security Disability Insurance (SSDI) benefits in 2025 is projected to increase by 2.63%, a modest boost compared to recent years. Here’s a brief look at what this means for SSDI recipients and how it may impact your benefits.
A Modest 2.63% Increase for 2025
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According to marca, The 2025 COLA for SSDI benefits is expected to rise by 2.63%, a smaller increase than the 3.2% adjustment in 2024 and significantly lower than the 8.7% increase in 2023. The more modest adjustment reflects a cooling inflation environment, providing less of a bump in payments compared to the past two years.
How Much Will Your SSDI Benefits Increase?
For the average SSDI recipient receiving $1,537 per month, the 2.63% increase would add approximately $40 per month, raising the total to around $1,577. Over the year, this adds an extra $480. However, actual benefit increases will vary based on individual circumstances. For example, a person receiving $500 per month would see their payment rise to $513, while someone receiving $2,000 would see an increase to $2,052.
Why Is the 2025 COLA Lower?
The Social Security Administration (SSA) bases the annual COLA on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures inflation. With inflation cooling in 2024, the projected COLA increase for 2025 is smaller, indicating more stable prices.
Historical Perspective on COLA Adjustments
COLA adjustments have varied significantly over the years. For example, there were no increases in 2010, 2011, and 2016, while recent years saw higher adjustments due to economic pressures, such as 5.9% in 2022 and 8.7% in 2023. The lower forecast for 2025 aligns with a trend toward more moderate increases.
Prepare for the Final COLA Announcement in October 2024
While the projected 2.63% increase offers some financial relief, SSDI recipients should manage their expectations for a smaller boost in 2025. The official COLA will be finalized in October 2024, so staying informed will be crucial for accurate financial planning in the year ahead.
