Veterans and welfare recipients can expect a slight increase in their benefits next year. After the larger increases in previous years, this could be a disappointment.

Beneficiaries of Direct social security payments And Payment of veterans benefits could see a cost-of-living adjustment (COLA) of less than 3% in 2025. That would be the lowest increase since before the COVID-19 pandemic, as predicted by an independent watchdog group.

Veterans continue to receive more money

Last week, officials from the Seniors League— a member of TREA: The Enlisted Association — announced its latest forecast for the coming year Social Security COLA ratesThey assume that the adjustment will be less than 2.6%.

In its announcement, the group stressed that this number “significantly lower” than the 3.2% Adjustment will be implemented in early 2024. The cost of living adjustment rate has not been below 3% since early 2020, when it was only 1.3%.

Given these projections, for many recipients, it may not be enough for the adjustment to keep pace with rising costs in the coming year.

Every year at the beginning of October, social security officials announce their Cost of living Adjustments for the coming calendar year. This announcement is eagerly awaited by many as it will directly impact the financial well-being of many people.

Estimates from the Senior Citizens League

In recent years, estimates released by the Seniors’ Association in late summer have proven remarkably accurate, often within one percentage point of the official adjustment figures. This predictive accuracy provides a useful preview of what to expect.

Impact on veterans

The annual Social Security announcement is especially important for veterans because Congress ties increases in veterans’ payments to the Social Security Administration’s calculations.

Who benefits?

Approximately 5 million veterans and 2 million military retireess receive monthly benefit checks from the Department of Veterans Affairs. The increase in the cost of living adjustment (COLA) affects several payouts, including:

• Disability compensation
• Clothing allowances
• Care and compensation benefits
• Other Department of Veterans Affairs assistance programs

For those who rely on these benefits, it is critical to understand these adjustments as they have a direct impact on their financial planning and stability.

For a veteran who $1,500 per month in disability payments, a cost of living adjustment of 2.6% would mean an additional $39 each month. However, in 2023, this number rose to 8.7%or about $130 per month for the same veteran.

Understanding cost of living adjustments

Social security officials calculate the annual Cost of living adjustment based on the Consumer Price Index for municipal wage earners and office workers. If these workers do not see an increase in their annual salary, federal planners may decide that no adjustment is necessary.

The impact on veterans and seniors

However, representatives of the Senior Citizens League stressed that the government’s “failure to bring inflation back to pre-pandemic levels” has put additional pressure on seniors and veterans’ benefit recipients, making the size of the adjustment critical to the financial health of many households.

• Veterans: The increased adjustment helps veterans cope with the rising cost of living.
• Seniors: Many seniors rely heavily on these adjustments when setting their monthly budget.