📋 July CPI Report Offers Early 2025 COLA Estimates (AARP Article)

[SpringIsHereVA]

FROM THE ARTICLE - SEE ARTICLE FOR MORE!!!

Social Security COLA 2025: How Much Will Payments Increase Next Year?

With inflation cooling, analysts estimate benefit boost could come in a bit under 3%.

By Andy Markowitz, AARP. Published August 14, 2024.

The first of three numbers the Social Security Administration (SSA) will use to determine the 2025 cost-of-living adjustment (COLA) is in, and it points to a more modest increase in monthly benefit payments next year.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) rose by 2.9 percent in July compared to a year ago. The COLA is based on how much that federal inflation gauge changes in July, August and September from one year to the next. The final figure for 2025 will be announced in October.

https://www.aarp.org/retirement/social-security/info-2024/cola-estimate-2025.html

[SpringIsHereVA]

[10/1/24] Gail @GailL1 , do you know when the 2025 COLA will be OFFICIAL?

Thanks,

Nicole

[GailL1]

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@SpringIsHereVA wrote:

[10/1/24] Gail @GailL1 , do you know when the 2025 COLA will be OFFICIAL?

Thanks,

Nicole

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After the CPI numbers are finished for the month of September 2024 - announcement will be on October 10 

But there is a separate computation that has to be done before a beneficiary knows how much their SS benefit will rise, if any.

Once the 2025 Medicare Part B premiums are announced, shortly afterward, Social Security in November will post for and notify each beneficiary how much their increase, IF ANY, will be added to their SS benefit.  The SS Hold Harmless Provision is applicable here.

What that (Hold Harmless Provision)  means is there is a protection in the SS law that basically says that your SS benefit amount cannot go down in amount based on a deducted Part B premium increase.  So if the Part B premium increases higher than the COLA, your benefit amt cannot go down further than the amount you are now receiving in your benefit.  

This Hold Harmless Provision DOES NOT protect those beneficiaries who do not have Part B premiums automatically deducted from their Social Security Benefit.  Thus those beneficiaries who are not yet on Social Security but are on Medicare are not protected by this provision

SSA.gov Hold Harmless Provision Explained 

Comprendo??

[SpringIsHereVA]

[10/1/24] Yes and thanks Gail @GailL1  👍👍👍  Nicole

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[*** GAIL wrote: After the CPI numbers are finished for the month of September 2024 - announcement will be on October 10 

But there is a separate computation that has to be done before a beneficiary knows how much their SS benefit will rise, if any.

Once the 2025 Medicare Part B premiums are announced, shortly afterward, Social Security in November will post for and notify each beneficiary how much their increase, IF ANY, will be added to their SS benefit.  The SS Hold Harmless Provision is applicable here.

What that (Hold Harmless Provision)  means is there is a protection in the SS law that basically says that your SS benefit amount cannot go down in amount based on a deducted Part B premium increase.  So if the Part B premium increases higher than the COLA, your benefit amt cannot go down further than the amount you are now receiving in your benefit.  

This Hold Harmless Provision DOES NOT protect those beneficiaries who do not have Part B premiums automatically deducted from their Social Security Benefit.  Thus those beneficiaries who are not yet on Social Security but are on Medicare are not protected by this provision

SSA.gov Hold Harmless Provision Explained 

Comprendo?? ***]

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[DWCole3501]

My medical expense are up over 6%, rent is up 6%, food 10%. Something very wrong with the COLA calculation formula.

[GailL1]

@DWCole3501 

If you want to learn more about how the government computes the CPI-W used to set the coming year’s COLA, this gives a pretty good explanation - 

Investopedia 08/14/2024 - Basket of Goods: Definition, CPI Calculation, and Example 

This takes into consideration the cost of these goods all over the country - or try to - from the lesser cost areas to the greater cost areas so it includes as much data as possible.

Any COLA adjustment is made by comparing the CPI-W figures for July, August and September of one year to the next.

This type of COLA started in 1975 before that Congress had to pass each one.  The highest one was in 1980 - 14.3% - but we sure don’t want to go back to that era.  Some years, we got ZERO -2009, 2010 and 2015.

Here is the historic chart if interested.  COLA increases by the year.

SSA.gov - Cost of Living Adjustment History  

[SpringIsHereVA]

[9/9/24] Hi @DWCole3501 , when my Retirement Social Security INCREASES, so do my BILLS. So yes, ALOT of us NEVER get to enjoy the increases. Also folks who are getting HELP from the Government MAY lose that help with an increase. Thanks for stopping by.  Nicole  👵

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[*** DW wrote: My medical expense are up over 6%, rent is up 6%, food 10%. Something very wrong with the COLA calculation formula. ***]

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