“This 2.5% increase will provide much-needed relief to seniors and disabled individuals who rely on Social Security benefits,” said SSA Commissioner Andrew Saul. “It ensures that their incomes keep pace with rising living costs.”
According to the Bureau of Labor Statistics, the CPI-W increased by 2.9% in the twelve months ending September 2023. This represents a slight decline from the 3.1% increase recorded in 2022.
The COLA adjustment is designed to protect Social Security benefits from the effects of inflation. Over the past decade, COLA adjustments have averaged 1.7%.
The 2025 increase will affect approximately 65 million Social Security beneficiaries, including retirees, survivors, and disabled individuals. The average monthly Social Security benefit is expected to increase from $1,827 in 2024 to $1,870 in 2025.
“While this increase is welcome news, it is important to remember that Social Security benefits are not designed to replace all income in retirement,” said Dr. Alicia Munnell, director of the Center for Retirement Research at Boston College. “Individuals should consider supplementing their benefits with other sources of income, such as savings, investments, and part-time work.”
The SSA is expected to release the exact benefit amounts for 2025 later this year.
