Social Security COLA Increase to Add About $50 per Month in 2025

The Social Security Administration has increased Social Security and Supplemental Security Income payments for 2025 by 2.5%, roughly $50 per month, in its annual cost-of-living adjustment, the organization announced Thursday.

That boost is slightly below the average annual cost-of-living adjustment of 2.6%, the administration noted in its announcement. The most recent adjustment was 3.2% for 2024, when inflation was still at a higher level and hitting many retirees’ pocketbooks.

The adjustment will affect payments for more than 72.5 million Americans, including about 68 million Social Security beneficiaries and 7.5 million people receiving SSI. Some people, the administration noted, receive both payments.

“Social Security benefits and SSI payments will increase in 2025, helping tens of millions of people keep up with expenses even as inflation has started to cool,” Martin O’Malley, commissioner of the Social Security Administration, said in a statement.

The increase is in line with a September forecast by the Senior Citizens League, a nonprofit that tracks the benefits. They estimated that increase would boost the average Social Security payment by $48 to $1,968.

“Some other adjustments that take effect in January of each year are based on the increase in average wages,” the administration wrote in its announcement. “Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) is slated to increase to $176,100 from $168,600.” 

The administration will begin notifying people about the new benefit via mail starting in early December. It also noted that, for the first time, beneficiaries will “receive a newly designed and improved COLA notice that makes it easier for customers to find the information they need most.”