Social Security Cost of Living Increase in 2025: Here’s What Experts Predict

With 68 million people receiving Social Security benefits, many are eagerly awaiting the official announcement of the Social Security Administration’s 2025 COLA increase. Each year, the SSA announces an adjustment to the amount it will pay beneficiaries due to inflation. This adjustment is based on a percentage increase in the cost of living.

The cost-of-living adjustment (COLA) will determine how much extra will be added to your monthly payments, if you receive benefits. The administration typically announces next year’s adjustment a few months in advance, in October. However, as we get closer to the date, experts who study inflation trends can make fairly accurate predictions about what the COLA could be in 2025.

The latest estimate gives us a closer look at what the official rate could be when it’s announced in a few months. We’ll tell you more below. For more, check out four ways you could lose your Social Security benefits and how to estimate your Social Security benefit amount with this free online tool.

What is Social Security COLA?

To address the effects of inflation, Social Security recipients typically receive an annual cost-of-living adjustment, or COLA, with their January check. The adjustment is based on average changes over time in prices paid for consumer goods and services and is determined by the Department of Labor’s Bureau of Labor Statistics. The Social Security Administration sets the COLA in the third quarter of each year.

What government benefits are adjusted based on COLA?

Social Security isn’t the only government benefit affected by the COLA. Social Security Disability Insurance, Supplemental Security Income, Medicare, the Supplemental Nutrition Assistance Program (including food stamps and other programs) all use the COLA to account for inflation when setting benefits.

What could be the COLA increase in 2025?

The COLA for 2024 is 3.2%. Looking ahead, the Senior Citizens League, a nonpartisan advocacy group for seniors, after looking at monthly inflation trends this year, projects the COLA for 2025 will be 2.57%. That’s down from the 2.63% forecast in July.

“Our model indicates a substantially lower cost of living adjustment (COLA) for next year,” the group said in a statement.

Seniors are watching this adjustment closely because the annual change to the COLA is designed to help them cope with rising costs. And while the annual increase in the COLA has been as high as 8.7% in recent years, some say it’s not enough to cover inflation. According to a survey by the Senior Citizens League, 69% of respondents said their household expenses increased faster than the COLA last year, with food and housing costs leading the way.

COLA increases year by year

Year	Increase compared to the previous year
2024	3.2%
2023	8.7%
2022	5.9%
2021	1.3%
2020	1.6%

Note: The Social Security Administration typically announces the adjustment during the second week of October. The new rate goes into effect the following January.

Keep in mind that these are estimates that can change each month based on the previous month’s inflation rate, and while they tend to be somewhat in line with the official rate, they are not always accurate.

For more information, see how to apply for Supplemental Security Income and our Social Security and SSDI fact sheet.