The nation’s more than 70 million Social Security recipients may want to temper their expectations of how much more they’ll get in 2025. Retirees are looking at an average monthly increase of $48, or a 2.5% increase, according to projections released Wednesday.
The 2025 cost of living adjustment, or COLA, which is based on the rate of inflation, is now expected to come in below last month’s 2.57% calculationThe Senior Citizens League (TSCL), an advocacy group for older Americans, said. The updated forecast came hours after the government reported it prices rose 2.5% in the 12 months ending in August, as inflation continues to moderate.
The estimated increase is not yet official, as the Social Security Administration typically sets the following year’s COLA in mid-October. A 2.5% increase would translate to an average monthly benefit of $1,968 and show up in most recipients’ benefit checks in January.
While a 2.5% increase would be a smaller increase than the 3.2% received in 2024, it falls roughly within the bounds of the historical norm, which has averaged about 2.6% over the past two decades. COLA ran as low as 0.0% in 2010, 2011 and 2016 and as high as 8.7% in 2023.
The Social Security Administration sets its annual COLA based on inflation during the third quarter, or from July to September. The agency takes the average rate of inflation over that period from what’s called the Consumer Price Index for Urban Wage and Office Workers, or CPI-W, which tracks the spending of working Americans.
If that inflation is higher than the same period a year earlier, the COLA is adjusted up by the difference.
“Ensuring that seniors have enough to support and house themselves with dignity is an important reason why we advocate for a minimum COLA of 3%,” Shannon Benton, TSCL’s executive director, said in a statement. “About two-thirds of seniors depend on Social Security for more than half of their monthly income, and 28% are completely dependent on it,” Benton added, citing TSCL research.