People in the U.S. receiving Social Security checks will see them increase slightly in January, but not as much as they’ve seen them go up in recent years.
This Thursday, the Social Security Administration announced that there would be a 2.5% Cost of Living Adjustment (COLA) increase for 72.5 million Social Security and Supplemental Security Income beneficiaries next year. That’s equivalent to around $50 per month on average.
“Over the last decade the COLA increase has averaged about 2.6 percent,” said the administration. “The COLA was 3.2 percent in 2024.”
Compared to past increases, the 2025 adjustment is the lowest since a 1.3% increase in 2020, which was set before the COVID-19 pandemic caused disruptions to the global supply chain. Since then, the U.S. has been dealing with high inflation that only recently came down enough for the Federal Reserve Bank to finally lower interest rates after a series of raises intended to tame inflation.
In 2021, there was a 5.9% increase, followed by an 8.7% increase in 2022. Prior to the pandemic, the highest COLA increase from 1983 through 2019 was a 5.8% increase in 2008. Around that time, the Great Recession hit, and in 2009 and 2010 there were no increases. For the next decade, increases remained small. From 1975 through 1982, increases ranged from around 6% to more than 14% per year.
An increasing number of Americans rely on government programs such as Social Security, Audacy reported earlier this month.
Per the SSA, nearly 68 million Social Security beneficiaries will see the 2.5% COLA increase in January. For those who receive SSI, increases begin Dec. 31 of this year. Some people receive both types of benefits.
“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,” said Martin O'Malley, Commissioner of Social Security.
Even though this year’s increase is lower than previous years, CNBC said that could be seen as a good thing.
“It’s better when the number is small, because it means that the inflation experienced by seniors is not as bad as it might have been,” said Charles Blahous, senior research strategist at George Mason University’s Mercatus Center cited by the outlet.
Other adjustments expected to kick in once January rolls around are based on the increase in average wages, the SSA explained. Based on that increase, the maximum amount of earnings subject to the Social Security tax is set to increase from $168,600 to $176,100.
“Social Security begins notifying people about their new benefit amount by mail starting in early December,” said the administration. For the first time this year, beneficiaries should expect to receive a newly designed and improved COLA notice.
Anyone with a personal my Social Security account can view their COLA notice online, and those who wish to do so much establish their personal my Social Security accounts by Nov. 20 to see their COLA notice online. To get started, visit www.ssa.gov/myaccount.
Information about Medicare changes for 2025 will be also available at www.medicare.gov.