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The Social Security cost-of-living adjustment (COLA) for 2025 is projected to rise by just 2.5%, according to the latest figures. This slight increase reflects a continuing downward trend in inflation, making it the lowest adjustment since 2021. According to the Senior Citizens League (TSCL), the 2025 COLA is even lower than earlier estimates of 2.63% and 2.57% .
- The projected Social Security cost-of-living adjustment (COLA) for 2025 is 2.5%, the lowest since 2021.
- The average monthly benefit increase will be about $48, bringing the total to $1,968 for most recipients.
- The COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to track inflation.
- Many seniors report that COLA increases don’t fully cover rising costs for essentials like food, housing, and healthcare.
- A new rule starting in September 2024 will exclude food benefits from counting toward SSI eligibility, potentially increasing support for recipients.
The Social Security Administration adjusts benefits annually based on inflation rates tracked through the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This year’s lower-than-expected rise is influenced by cooling inflation, which hit a record high of 8.7% in 2023, before dropping to 3.2% in 2024 .
The projected 2.5% increase would give retirees an average monthly benefit increase of $48, with payments rising to about $1,968. Although lower than previous years, this figure is not far from the historical average COLA of 2.6% . However, many seniors feel the adjustment does not keep pace with real-world expenses. The TSCL has reported that 69% of seniors believe their household costs—particularly for food, housing, and medical needs—rose faster than their 2024 benefits increase .
Shannon Benton, executive director of TSCL, advocates for a minimum COLA of 3%, stressing that many retirees depend on Social Security for the majority of their income. Benton noted that roughly two-thirds of seniors rely on the program for more than half their monthly income, with 28% depending on it entirely .
In addition to the COLA projections, upcoming changes to Supplemental Security Income (SSI) rules are also expected to impact beneficiaries. Starting September 30, 2024, food benefits, such as those from the Supplemental Nutrition Assistance Program (SNAP), will no longer be counted as income when determining SSI eligibility. This change could allow more individuals to qualify for benefits or increase payments for current recipients . The average SSI payment of $943 could see a boost under this new rule, offering additional financial relief to some of the nation’s most vulnerable citizens .
As inflation moderates, many Americans are feeling the effects, and the Social Security increase for 2025 reflects this cooling trend. However, the relatively small rise may continue to challenge seniors and SSI recipients, who still face rising costs for essential goods and services.