The cost of living adjustment (COLA), which determines how much Social Security benefits will increase year, is calculated by the Bureau of Labor Statistics. For the more than 70 million beneficiaries who depend on these benefits to pay for their everyday living expenses, it is crucial to learn more about this yearly increase. Gallup has been conducting yearly surveys to determine seniors’ reliance on Social Security benefits for the past 23 years. According to 80% to 90% of respondents since 2002—including 88% in April 2024—their Social Security benefit is essential to their ability to make ends meet.
COLA Increase 2025
The 2.5% increase, which is the lowest since 2021, nevertheless maintains beneficiaries’ spending power somewhat steady and offers some inflation respite. Given the growing costs of necessities, even a modest COLA can have a significant impact on retirees and those reliant on Social Security. In order to keep up with inflation without reducing their actual purchasing power, the majority of recipients will see a little increase in their monthly income as a result of this modification.
How the 2025 COLA will change your benefit?
The administration announced on Thursday that the 2.5% COLA hike will enhance the average Social Security benefit by roughly $50 beginning in January. According to the Social Security Administration, the average monthly benefit payment for retirees this year is approximately $1,927. The monthly amount will climb to $1,976 with the 2.5% increase. Starting next year, the average monthly payment for married couples who both get Social Security will increase from $3,014 to $3,089 per month.
Beginning with the January 2025 payments, about 68 million Social Security claimants will receive the revised 2025 amounts. According to the SSA, an additional 7.5 million Supplemental Security Income (SSI) recipients will begin receiving their higher benefits on December 31, 2024.
