2025 Cola Increase by 2.5 Percent: Over 71 million seniors are getting social security benefits in USA from the social security department and all of them are looking for hike in their monthly payment of SSA. Seniors are paying tax on their social security payments for month to the government and due to unchanged income criteria of the applicants.
However the data of consumer price index is indicating that government may increase 2.5% COLA in 2025 for social security payments. If you are getting your social security payments then you should check the latest data of SSI and SSDI payment which will help you to know about the upcoming increment in SSA payments in 2025.
2025 Cola Increase by 2.5 Percent
The cost of living adjustment is a big factor to decide monthly payment of social security benefits in the country. As year 2024 is coming to an end and Many economist in the country and social security specialist have started to release their data of upcoming COLA increment 2025 by seeing the data of CPI.
According to the specialists, the inflation is not increasing in 2024 as compared to previous years. According to the data, the COLA was increased 3.2% in 2024 and if the CPI index remain same throughout the year then authority will increase only 2.5% COLA for the year of 2025.
Reduced COLA Hike in 2025
The cost of living adjustment is very dynamic in USA which is decided according to inflation. Before the covid-19 period, the COLA increment was 1.6% in 2020 and 1.3% in 2021. But beneficiaries get the hike in their payment in 2022 as, the inflation was on peak during this session, so government had to increase COLA to 5.9%. After that the authority again increase the COLA to 8.7% in 2023 due to high rates of inflation in the country.
But after that, inflation comes under the control in 2024 and government CPI index do not increase much in this year so beneficiary is received 3.2% increment in COLA for this year. However the COLA rates of the upcoming year of 2025 will be decided at the end of the year and final report of CPI 2024, But according to the latest data of previous months of this year, government will not increase much rates for 2025 and can increase up to 2.5% COLA only for social security beneficiaries.
85% tax on social security payments in 2024
A portion of Social Security benefits is taxed if your income exceeds certain thresholds. For individuals earning between $25,000 and $34,000, up to 50% of benefits can be taxed, and for couples earning between $32,000 and $44,000, the same applies. If income exceeds $34,000 for individuals or $44,000 for couples, up to 85% of benefits may be taxed. Former President Trump has proposed eliminating these taxes, which would reduce the funds available for Social Security and Medicare, potentially increasing the federal deficit by $1.6 to $1.8 trillion by 2035.
Meanwhile, Medicare Part B premiums, which are automatically deducted from Social Security checks, have been rising faster than Social Security’s cost-of-living adjustments (COLA), growing at an average of 5.5% per year compared to the COLA’s 2.6%. This means retirees are seeing a larger share of their benefits eaten up by Medicare costs over time.
Trump on SSA Payments
Since the US presidential election 2024 are coming, both parties are targeting their 71 million Seniors in the country. Recently Donald Trump has promised to the Seniors in the country that if he elected in elections 2024 again, then he will not cut payments of social security beneficiaries.
Apart from this he is also advocating to not raising the age of getting pension in the country. Currently he post on social media that if he Re elected then he will not charge additional tax on social security payments. However according to The Economist and other stakeholders in the country, it may be challenging to provide tax free amount of SSA payments.
