Social Security Benefits Are Changing Next Year—Here’s Everything You Need To Know
As 2024’s third quarter begins, the 2025 Social Security cost-of-living-adjustment is soon to be announced. This annual change is what helps recipients of Social Security and Supplemental Security Income (SSI) benefits keep up with inflation.
So what’s expected for the 2025 COLA and how will that impact senior citizens and other recipients? Let’s get into it.
What are Social Security COLAs?
Social Security cost-of-living-adjustments (COLAs) help determine the annual change in Social Security and SSI benefits. The Social Security Administration uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the Bureau of Labor Statistics from the third quarter of the year prior to the third quarter of the current year to determine yearly COLAs.
What is the purpose of Social Security COLAs?
Social Security COLAs exist to ensure inflation does not weaken beneficiaries purchasing power so the benefits won’t lose their value to inflation.
What is the estimated 2025 Social Security COLA?
The estimated 2025 COLA is an increase of 2.63%.
What was the Social Security COLA of 2024?
At the start of the year, the Social Security cost-of-living adjustment increased 3.2%. This increased payments for more than 71 million Americans on Social Security and SSI.
Therefore, if the estimated COLA for 2025 gets approved, it would be a lower increase than what was seen in 2024.
How would Social Security checks change with the new COLA?
According to LaGrada, Social Security checks would increase by the below amount if the 2.63% cost-of-living-adjustment was approved.
| Retirement benefits | Social Security payment amounts | With 2025 cost of living adjustment (2.63%) |
| On average | $1,900 | $1,950 |
| Age 62 | $2,710 | $2,781 |
| Age 67 | $3,822 | $3,923 |
| Age 70 | $4,873 | $5,001 |
| SSI benefits | Social Security checks | With 2025 cost of living adjustment (2.63%) |
| On average | $698 | $716 |
| Individuals | $943 | $968 |
| Couples | $1,415 | $1,452 |
| Essential person | $472 | $484 |
Is this a good or bad thing?
Immediately, one might figure a lower increase than the year prior would be a bad thing. And though a higher increase in COLA would lead to greater Social Security checks, the smaller raise actually indicates that inflation is shrinking, according to Nasdaq. This means that at the moment, beneficiaries are paying less for daily items such as groceries and utilities. So even if the increase isn’t as hefty as last years, those receiving benefits might still be able to reap financial gain.
When does the official 2025 Social Security COLA get announced?
Since the third quarter of 2024 has not been completed, no estimates are certain. Therefore, Americans won’t know the official 2025 COLA until October 2024.
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