The Social Security Administration today announced that millions of Social Security recipients will get a 2.5% cost-of-living increase to their monthly checks beginning in January, according to the Associated Press. The cost-of-living adjustment, or COLA, for retirees translates to an average increase of more than $50 for retirees every month, agency officials said.
About 72.5 million people, including retirees, disabled people, and children, get Social Security benefits.
Recipients received a 3.2% increase in their benefits in 2024, after a historically large 8.7% benefit increase in 2023, brought on by record 40-year-high inflation. The smaller increase for 2025 reflects moderating inflation.
The agency will begin notifying recipients about their new benefit amount by mail starting in early December. Adjusted payments to nearly 7.5 million people receiving Supplemental Security Income will begin on Dec. 31.
The program is financed by payroll taxes collected from workers and their employers and that is slated to increase to $176,100. The maximum amount of earnings subject to Social Security payroll taxes was $168,600 for 2024, up from $160,200 in 2023.
The announcement comes as the national social insurance plan faces a severe financial shortfall in the coming years.
