The 2025 Social Security COLA increase begins in three weeks, and many are wondering how it will affect their monthly payments and other things. In early October, the Social Security Administration announced the new COLA, which is lower than previous years but still a boost. We'll explain below.
The administration said the 72.5 million Social Security recipients will receive a 2.5% cost-of-living adjustment in January 2025. Social Security beneficiaries, including retirement, survivors, disability insurance, and Supplemental Security Income, will receive higher monthly payments after the annual adjustment.
The administration adjusts Social Security benefits annually using COLA. The 2.5% increase in 2025 is lower than 2024's 3.2% and 2023's 8.7%, indicating inflation is cooling.
COLA affects more than Social Security. COLA accounts for inflation in Social Security Disability Insurance, Supplemental Security Income, Medicare, and SNA programs (including food stamps).
We followed expert predictions before the COLA announcement, and they were accurate. The nonpartisan Senior Citizens League predicted a 2.5% COLA increase last month, and that's what happened.
Since January, the Senior Citizens League has predicted a COLA of 2.5% to 2.7%, saying seniors are disappointed that the CPI-W doesn't measure inflation as they experience it. In a recent league survey of 3,000 older Americans, 72% said Congress should replace the COLA calculation with an index that better reflects seniors' costs.
"Our research shows that 67% of seniors depend on Social Security for more than half their income and that 62 percent worry their retirement income won't even cover essentials like groceries and medical bills." TSCL Executive Director Shannon Benton commented on the latest COLA.
Many factors affect your monthly check, but the 2.5% increase will benefit the 72.5 million Americans receiving Social Security and Supplemental Security Income. A 2.5% COLA increase raises the average monthly benefit by $48. 2025's COLA is lower than 2024's 3.2% and 2023's 8.70%.