Social Security Cost of Living Increase for 2025: Latest Expert Forecasts Available

Social Security recipients have their eyes set on mid-October for the annual cost-of-living adjustment. That’s when the Social Security Administration typically announces the adjustment, which determines how much extra benefit recipients will receive in their monthly checks for the following year.

Announced as a percentage increase, the COLA affects all benefit recipients, not just standard retirement benefits. Survivor benefits, Social Security Disability Insurance and Supplemental Security Income will also get increases in January.

The SSA is making this adjustment to combat the effects of inflation. The COLA for 2024 is currently 3.2%, but experts who closely monitor inflation trends are predicting a smaller increase for 2025.

For more information, don’t miss 4 Actions That Could Cost You Your Social Security Benefits and How to Apply for Social Security Disability Insurance.

What is Social Security COLA?

To address the effects of inflation, Social Security recipients typically receive an annual cost-of-living adjustment 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, and the Supplemental Nutrition Assistance Program (including food stamps and other programs) all use the COLA to account for inflation when setting benefits.

When will SSA officially announce the 2025 COLA increase?

The Social Security Administration typically announces the COLA increase for the following year in mid-October, with the new rate taking effect in January of the new year.

We expect the SSA to announce the 2025 COLA increase on October 10, 2024.

What do experts predict for COLA in 2025?

The Senior Citizens League, a nonpartisan advocacy group for seniors, has projected a lower COLA for 2025 than the 3.2% in 2024. The league’s latest forecast is for a COLA of 2.5%, slightly lower than its August forecast of 2.57%.

If the 2025 COLA is 2.5%, this would translate into a $48 increase in the monthly benefit amount, bringing the average monthly benefit amount to $1,968. The League also points out that while the latest forecast is lower than in recent years, 2.5% is still within the historical average of the last 20 years of 2.6%.

While a 2.5% increase is probably less than what beneficiaries want, there’s more to it. A lower COLA is a sign of lower inflation, which could mean lower prices for some of your necessities.

It’s also important to keep in mind that the $48 increase is the average monthly benefit, and the exact amount depends on several factors. For example, for retirement benefits, if you wait until age 70 to apply, you’ll receive a larger monthly check than if you apply as soon as you’re eligible, which is at age 62.

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.

To learn more, find out why SSI recipients aren’t getting a check this month and what to do if you received an overpayment on your monthly benefit check.