The Social Security Administration has announced the cost of living adjustments (COLA) for 2025 and it’s the lowest increase recipients have received in years.
Social Security benefits and Supplemental Security Income payments will increase for more than 72.5 million Americans by 2.5% in 2025, the SSA announced in a release.
Social Security retirement benefits will increase by about $50 per month starting in January.
While the 2.5% increase is less than the COLA increases awarded in 2021, 2022 and 2023, it is consistent with the average increase granted over the past 10 years.
“Over the last decade the cost-of-living adjustment (COLA) increase has averaged about 2.6%,” the SSA announced Thursday, Oct. 10. “The COLA was 3.2% in 2024.”
After the COVID-19 pandemic, 2022 saw a COLA increase of 5.9%, 2023 saw an all-time high COLA increase of 8.7%, and 2024 saw an increase of 3.2%, according to SSA.
Nearly 68 million Social Security beneficiaries will see the 2.5% COLA increase starting Jan. 1, 2025, and nearly 7.5 million SSI recipients will receive payments on Dec. 31, 2024.
“By law, the annual inflation adjustment is based on the average inflation during July, August, and September as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W),”advocacy group, The Senior Citizens League states in a September release.
“The Bureau of Labor Statistics averages the CPI-W for these three months and then compares it with the same time frame from the previous year.”
How to view COLA increases
Social Security will begin notifying people about their new benefit amount via mail starting in early December. A newly designed COLA notice will be sent out to make finding the information beneficiaries need, easier to find.
The new notice uses plain language, is only one page long and will provide the exact dates and dollar amounts of a person’s new benefit amount.
Those who have a my Social Security account can view their COLA online.
What it means for the future
Many recipients and advocates worry the increase may not be enough, as last year’s COLA did not keep up with real-life expenses.
In a 2024 survey conducted by The Senior Citizen League and completed by 1,550 senior citizens, 69% of participants said their household costs grew faster than cost-of-living adjustments.
Costs for food and housing led the way, according to the group.
“The fact is that COLAs have become less and less likely to keep up with inflation over time,” the league said in a release. ” … Just one of the five COLAs implemented so far in the 2020s (20%) has outpaced inflation.”
When COLAs fall short, seniors can be left without thousands of dollars in what they expected from Social Security.
COLA shortfalls have long-lasting effects.
The advocacy group pointed out that if a recipient receives $1,000 in their first year of retirement, and then receives a 4% cost of living adjustment when inflation is 5%, their check will be $1,040 but should be $1,050.
If things continue on trend for the following year and inflation is 5%, and the COLA is also 5%, their check would be $1,092 but should be $1,102.50 – “an even bigger gap than the year before,” the league reported.
