The Cost of Living Adjustment was enacted in 1975 by using a formula to apply the percentage increase in the CPI-W from the third quarter of one year to the third quarter of the following year. This is measured by the The U.S. Bureau of Labor Statistics. Social Security’s increases have always been based on these COLA figures. On October 10, 2024, the Social Security Administration released the following increases for 2025:
Social Security and Supplemental Security Income (SSI) will increase by 2.5% in 2025.
Approximately 72.5 million beneficiaries will see this adjustment reflected on their Social Security checks in January 2025 (or December 31, 2024). This percentage is a decrease from the 8.7% we saw in 2023 and 3.2% in 2024.
In 2024, the average Social Security check for a retired worker was $1,907. In 2025, the average Social Security check will increase to $1,954. 2025’s COLA announcement will also affect the maximum amount of earnings taxable under the social security tax. 2024’s maximum was $168,600, and starting in 2025, that maximum will be raised to $176,100.
Summary of Cost of Living Adjustments received since 1975:
Source: ssa.gov/cola
In December 2024, Social Security COLA notices will be available online to most beneficiaries in the Message Center of their my Social Security account. The simplified COLA notice is now only one page: https://www.ssa.gov/myaccount/
As always, our team is here if you have any questions! 1-800-627-2768
A non-government entity. Not affiliated with or endorsed by any government agency. We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.