The day seniors have been waiting for is almost here. On October 10, the Social Security Administration (SSA) will be able to announce an official cost-of-living adjustment (COLA) for 2025. There’s been loads of speculation about that COLA over the past few months, so it will be nice to finally put an end to the guessing game and give seniors a straight answer.

But tomorrow’s news also doesn’t have to come as a total surprise. And at the same time, tomorrow’s news may be incomplete. Here’s what you need to know as we gear up for what could be the most important Social Security day of the year.

Image source: Getty Images.

A smaller COLA is likely due to easing inflation

In 2024, Social Security benefits rose 3.2% following a year of fairly notable inflation. But inflation has cooled since the start of 2024, so next year’s COLA is likely to be smaller than the raise that was granted earlier this year.

Initial estimates are calling for a 2.5% COLA in 2025. But the final number may come in a bit lower.

The good news is that 2025 is not expected to be a 0% COLA year — something that’s happened several times in the past. But it’s important to brace for a more minimal raise than in recent years.

That said, because Social Security COLAs are tied to inflation, a smaller one isn’t automatically a bad thing. If anything, it’s an indication that you may be in for relief in the form of lower prices on essentials like groceries and gas.

A key point of information may not be available just yet

Once the SSA announces a COLA, you may rush to grab a calculator and apply that percentage to your current monthly benefit to see how much more money you’re in line for in 2025. But not so fast. If you’re a Medicare enrollee, you’ll need one more piece of the puzzle to determine how much your monthly income is actually going up.

Seniors who are enrolled in Social Security and Medicare at the same time have their Part B premium costs deducted from their monthly benefits automatically. But if the cost of Part B rises in 2025, which is pretty likely, it could eat into your Social Security raise. So until you have that information from Medicare, you can’t make any concrete plans with your COLA.

The news is coming soon enough

There’s no doubt that tomorrow’s Social Security announcement is going to be a big one. In addition to an official COLA, the SSA should be announcing a number of key changes that include 2025’s earnings-test limit (which applies to people working and collecting benefits at the same time), the wage cap for Social Security taxes, and the work credit earnings requirement.

Check out the news section of the SSA’s website for all of the details about these important 2025 updates. But do remember that if you’re on Medicare, you may not have all of the information you need to process your COLA news just yet.

The $22,924 Social Security bonus most retirees completely overlook

If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.

View the “Social Security secrets” »

The Motley Fool has a disclosure policy.