Approximately 72.5 million Social Security recipients will benefit from a 2.5% increase in their payments this year due to the annual cost-of-living adjustment (COLA). The COLA is designed to keep pace with inflation and maintain the purchasing power of beneficiaries.
The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which tracks the spending patterns of working Americans. According to the Social Security Administration, a person receiving an average benefit of $1,927 in 2024 will receive $1,975 in 2025, resulting in a monthly increase of $48 and an extra $576 over the course of the year.
The maximum allotment for Supplemental Security Income (SSI) benefits will also increase from $943 to $967 per month. Benefits were raised on December 31, 2024, for SSI recipients and January 1, 2025, for Social Security retirement checks.
Some experts, such as Krisstin Petersmarck of New Horizon Retirement Solutions, caution that the COLA increase may not be enough for many retirees who rely heavily on their Social Security benefits. However, others, like Cliff Ambrose at Apex Wealth, point out that a lower COLA can still help retirees maintain their purchasing power when inflation slows down.
Source: https://www.newsweek.com/social-security-update-benefits-boost-cola-2025-2013011