lodibet Social Security Benefits to Climb 2.5% in 2025
Tens of millions of Americans receiving Social Security benefits are poised to see a 2.5 percent increase in their monthly checks next year to keep pace with inflation, the Social Security Administration said on Thursday, an uptick that’s on a par with average annual increases in recent decades.
The average monthly benefit for retired workers is set to increase by $49 to $1,976 starting in January, up from the current average of $1,927. While retirees and their dependents account for a majority of the more than 72 million Social Security beneficiaries, millions of others will also see their checks go up, including disabled workers, survivors of deceased workers and people with low incomes, as part of the Supplemental Security Income program.
“This adjustment means older Americans will receive needed relief to help better afford essential items from groceries to gas,” Jo Ann Jenkins, chief executive of AARP, said in a statement.
The cost-of-living adjustment is in line with the 2.6 percent average annual increase over the past 20 years, but it’s modestly lower than the 3.2 percent rise beneficiaries received this year. And it’s significantly less than the 8.7 percent uptick for 2023, when pandemic-related disruptions and supply shortages drove up inflation sharply. At that time, the Federal Reserve raised its benchmark interest rate to its highest level in decades, and has only recently started to cut it as inflation has cooled.
The 2025 Social Security adjustment, known as the COLA, reflects the slowdown in inflation.
“The COLA is meant to replace what people lost in buying power because of price increases,” said Teresa Ghilarducci, an economist at the New School who specializes in retirement security. “So we want that COLA to go down.”
Social Security calculates the adjustment using the Consumer Price Index for Urban Wage Earners and Clerical Workers, taking the average inflation readings from July, August and September of the current year and comparing them with the same period from a year earlier.
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