Social Security Cost-Of-Living Adjustment For 2025 Likely Announced Today—Here’s What To Know

Topline

The Social Security Administration on Thursday is expected to announce the cost-of-living adjustment for 2025, as analysts and advocacy groups are predicting the lowest increase to benefits in four years as inflation cools down.

Key Facts

The SSA’s cost-of-living adjustment, or COLA, is an annual increase to monthly Social Security payments that the agency calculates based on the Bureau of Labor Statistics’ consumer price index, which measures the monthly change to inflation.

The Senior Citizens League, a nonpartisan advocacy group, projected a 2.5% COLA for 2025 that would increase the average retired workers’ benefit by $48, to $1,968.

COLA also affects payments from Social Security Disability Insurance, Supplemental Security Income, Medicare and the Supplemental Nutrition Assistance Program.

Mary Johnson, an independent Social Security analyst, also predicted a 2.5% COLA—an estimate she said had a 17% likelihood of increasing and a 13% chance of decreasing, CNBC reported.

A 2.5% COLA would be in line with the Bureau of Labor Statistics report in August: Inflation was 2.5% that month, down from July’s 2.9% inflation and the lowest CPI reading since February 2021.

Social Security beneficiaries will have the adjustment added to their checks starting January 2025.

What To Watch For

The SSA is expected to announce the 2025 COLA on Thursday after the Bureau of Labor Statistics releases its September consumer price index.

Surprising Fact

The COLA was 8.7% in 2023, up from a 5.9% increase in 2022 before dropping to 3.2% this year. The 8.7% COLA was the largest increase since the early 1980s, according to SSA data, while a projected 2.5% would be the lowest since 2021, when it was 1.3%.

Big Number

71 million. That’s how many Americans received Social Security and Social Security Income benefits in 2024, according to the SSA.

Key Background

Annual COLA has been added to Social Security payments since 1975 and was intended to reflect the change in the cost of living over one year. Social Security payments are mostly given out to American retirees, and about 58% of retirees in the U.S. rely on Social Security as a “major source” of income, according to Gallup. A study published by the Census Bureau in 2021 found 28% of adult recipients rely on Social Security as their sole source of income. While COLA is meant to account for rising costs, advocacy groups like the Senior Citizens League have claimed the government has failed to adjust to rising healthcare, food and housing costs. A report by the Senior Citizens League earlier this year argued the average payment for retired workers in 2024 was worth “only about 80 cents on the dollar” compared to 2010, adding COLAs have “gradually become less likely to beat inflation over time.”

Further Reading