- Author: Michael Burry
- Jun 30, 2025
According to the latest estimate, the projected Social Security COLA increase for 2025 is 2.5%. In June, forecasters said there would be a 3% increase in the 2025 COLA as a prediction.
Will There Be A Cola In 2025?
The Social Security COLA announcement date for 2025 is in October 2024. The adjustment is based on third-quarter CPI data, which examines the inflation for urban wage earners and clerical workers for three consecutive months: July, August, and September. If we go by the data from early 2024, there is an indication that the 2025 Social Security COLA update could be approximately 2.5%.
What Is The Purpose Of The Social Security Administration’s COLA?
The SSA fundamentally designs the Social Security cost-of-living increase in 2025 to assist Social Security Disability Insurance and Supplemental Security Income recipients in maintaining their purchasing power amidst rising inflation. The Bureau of Labor's CPI-W determines the annual increase. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is a measure of the change in prices for consumer goods and services.
However, the Social Security 2025 COLA increase disappoints seniors, who have complained that their spending habits do not account for CPI-W. Therefore, in 2025, the COLA will be crucial as seniors struggle to meet their real-life expenses from 2024. According to estimates from the Bureau of Labor Statistics, the average cost of a grocery item has inflated by 24% since the year 2020.
Cost Of Living Adjustment 2025 Predictions
The predicted COLA increase for Social Security in 2025 is 2.5%, which is less than the 3.2% increase that took place in 2024.
| Year | Social Security COLA% Increase |
| 2025 | 2.5% |
| 2024 | 3.2% |
| 2023 | 8.7% |
| 2022 | 5.9% |
Automatic Cost-of-living Adjustments Received Since 1975
| July 1975 -- 8.0% | January 1984 -- 3.5% | January 1992 -- 3.7% | January 2000 -- 2.5% | January 2008 -- 2.3% |
| July 1976 -- 6.4% | January 1985 -- 3.5% | January 1993 -- 3.0% | January 2001 -- 3.5% | January 2009 -- 5.8% |
| July 1977 -- 5.9% | January 1986 -- 3.1% | January 1994 -- 2.6% | January 2002 -- 2.6% | January 2010 - 0.0% |
| July 1978 -- 6.5% | January 1987 -- 1.3% | January 1995 -- 2.8% | January 2003 -- 1.4% | January 2011 -- 0.0% |
| July 1979 -- 9.9% | January 1988 -- 4.2% | January 1996 -- 2.6% | January 2004 -- 2.1% | January 2012 -- 3.6% |
| July 1980 - 14.3% | January 1989 -- 4.0% | January 1997 -- 2.9% | January 2005 -- 2.7% | January 2013 -- 1.7% |
| July 1981 -- 11.2% | January 1990 -- 4.7% | January 1998 -- 2.1% | January 2006 -- 4.1% | January 2014 -- 1.5% |
| July 1982 -- 7.4% | January 1991 -- 5.4% | January 1999 -- 1.3% | January 2007 -- 3.3% | January 2015 - 1.7% |
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| January 2016 - 0.0% |
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| January 2017 - 0.3% |
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| January 2018 -- 2.0% |
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| January 2019 - 2.8% |
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| January 2020 - 1.6% |
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| January 2021 - 1.3% |
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| January 2022 - 5.9% |
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| January 2023 - 8.7% |
How Much Will My Social Security Benefits Increase in 2025?
The following table highlights an estimated breakdown of Social Security COLA adjustments for 2025 for various recipients:
| Beneficiary Type | Average monthly increase in 2025 (estimated) | Average check amounts: 2025 (estimated) |
| Retiree | $50.94 | $1,966.20 |
| Retired couple, both receiving benefits | $101.88 | $3,932.40 |
| A worker with a disability | $40.90 | $1,578.47 |
| Widow or widower | $47.40 | $1,829.17 |
| Children of deceased workers | $29.44 | $1,136.14 |
Table: Social Security COLA Increase 2025 chart
How Is Social Security COLA Calculated?
The Social Security Administration (SSA) calculates COLA by measuring
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The third quarter of this year saw an increase in CPI-W compared to the same period last year.
The organizations calculate the COLA increase by using the Social Security Cola Increase 2025 calculator, which bases its estimate on the numbers from the consumer price index for the months of July and August, as well as the projections for September.
Social Security benefits are a lifeline for their recipients, and nearly 72.2 million people will receive some form of Social Security benefit in April 2024. You can only get an estimate of the COLA increase, not the actual picture, such as the Medicare Part B premium.
If the premium increases, then the COLA will be low. Let’s understand this better with an example. In 2024, the Medicare Part B premium was $174.70, whereas in 2025 it will be $185, which indicates the potential COLA increase in Social Security for 2025 will be lower than in 2024.
Who receives a COLA?
Social Security retirement recipients are one of the largest groups to benefit from COLA. However, other recipients of disability benefits include individuals who receive
- Supplemental Security Income (SSI)
- A federal program that helps seniors who are 65 or older
- Blind and disabled people
- Individuals who get disability payments also get COLA.
- Military and federal civil service retirees
- Some unions negotiate COLAs in their contracts.
Changes in CPI-W also affect some government programs, such as free school lunches and food stamps.
Why is the COLA increase so important?
The COLA increase may seem insignificant. However, even with a small percentage increase in COLA, it may make a substantial difference in the dollar value over time. For example, the inflation rate was low from 2010 to 2020, which means the average increase was nearly 2.4% every year.
Now, let’s understand what difference this 2.4% inflation can make. Suppose you retire at age 62 today and get a monthly benefit of $2,000. When inflation is at 2.4%, you will receive a monthly benefit of $2,658, which will determine your purchasing power when you are 74 years old.
As ten years pass, you might need $3,370 each month to maintain the same purchasing power as when you first retired. Therefore, when you reach 84 without a COLA, your money will be nowhere near the same as when you started receiving benefits.
COLA is important for people living on a fixed income. The COLA was much higher in 2021, 2022, and 2023. However, people must not assume that Social Security will cover all their bills in retirement. It will be the biggest mistake that people who are about to retire may make.
FAQs About The Increase In Social Security Benefits
What does COLA mean for Social Security?
COLA stands for Cost-of-Living Adjustment, which increases Social Security benefits to keep pace with inflation and rising expenses.
How much more will Social Security recipients receive in 2025?
The increase depends on each recipient’s current benefit amount. Higher benefits receive larger dollar increases, while lower benefits receive smaller adjustments.
Does COLA increase taxable Social Security income?
Yes, a higher COLA may increase taxable Social Security income for some recipients, depending on total household income and tax filing status.
Will working affect my COLA-adjusted benefits?
Working does not reduce COLA increases, but earnings may temporarily reduce benefits for individuals who have not reached full retirement age.
Are survivor benefits included in the 2025 COLA?
Yes, survivor benefits also receive the 2025 COLA increase automatically.
Can COLA increases impact eligibility for other benefits?
Yes, higher benefit amounts may affect eligibility for income-based programs such as SSI, Medicaid, or SNAP in certain situations.How does the 2025 COLA affect disability claims handled by a lawyer?The 2025 Cost-of-Living Adjustment (COLA) increases SSDI and SSI benefit amounts, which a disability lawyer can review to ensure your updated payments are correct and to advise how the increase may affect eligibility for other income-based benefits.