2025 COLA increase Social Security

The cost-of-living adjustment (COLA) for Social Security benefits in 2025 will be 2.5%, the Social Security Administration announced .This means that the average monthly benefit for retired workers will increase by about $25 to $1,700 per month.

The COLA is a yearly adjustment that is intended to help Social Security benefits keep pace with inflation. The COLA is calculated using the Consumer Price Index for Wage Earners and Clerical Workers (CPI-W).

The 2025 COLA is lower than the 3.2% COLA that was announced for 2024. This is because inflation has slowed in recent months, and the CPI-W has not increased as much as it did in previous years.

The 2025 COLA will be the smallest increase in Social Security benefits since 2021, when there was no COLA at all. However, it is still a significant increase, and it will help to ensure that Social Security benefits keep pace with inflation and continue to provide a safety net for retirees.

The Social Security Administration will begin sending out notices to beneficiaries in December 2024. The COLA will be reflected in benefits paid in January 2025.