COLA estimates for 2025: How much would Social Security benefits rise?
The Social Security cost of living adjustment could be smaller for 2025 compared to previous years. Find out by how much payments are likely to increase.
Millions of Americans receive monthly payments through the Social Security program. According to the Social Security Administration, most benefits go to retired workers, although people with certain disabilities and survivors are also eligible through Supplemental Security Income and Social Security Disability Insurance.
Checks are distributed on a monthly basis based on the recipients’ date of birth, except for workers who retired before May 1997 and those who receive SSI, whose money arrives at the beginning of the month regardless of their date of birth.
As for the amounts, the exact number depends on the personal situation of each recipient. However, the government agency has an official table of approximate payments.
In 2024, the average amount for a retired individual is $1,907, while couples filing jointly can receive up to $3,303. The estimate for SSI beneficiaries is $943 per month for individuals and $1,415 for couples. These amounts increase annually thanks to the Cost of Living Adjustment, which serves to align SSI payments with inflation. In 2024, the COLA increase was 3.4%; however, for 2025 this adjustment could be smaller.
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How much would Social Security benefits rise in 2025? COLA estimates
The COLA increase is calculated based on the annual increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers. To determine this, the agency compares the CPI-W for the third quarter of the previous year with that for the third quarter of the current year. The difference between the two will be equivalent to the COLA increase.
As inflation has decreased over the past year, the Senior Citizens League, a nonpartisan senior advocacy organization, projects the 2025 COLA increase to be 2.57%, which is significantly lower than the previous increase.
The bump will likely be minor, and the bad news is that costs for other services are also increasing, resulting in a significant burden on beneficiaries. For example, in May, hospital costs rose 7.2% year-over-year, while seniors account for 70% of admissions.
Other services that have increased over the past year include motor vehicle maintenance and repair costs and electricity, which saw increases of 7.2% and 5.9%, respectively. Food-outside-home costs also rose 4% year-on-year.