Will Social Security COLA go up in 2025? Benefits likely to increase with cost of living

Social Security provides benefits to more than 71 million Americans, including retirees, veterans and dependents.

While benefits are initially calculated based on a worker's earnings record, these payments would quickly lose value over time without adjustments. To address this, legislation passed in 1973 introduced annual cost-of-living adjustments (COLA), which began in 1975.

The COLA varies significantly from year to year. For 2024, the Social Security COLA is 3.2%.

What is the estimated COLA for 2025?

With two months of data still pending, current estimates suggest a 2.57% COLA increase for 2025, which would add about $50 per month to benefits, according to the Detroit Free Press .

However, according to the Seniors League's 2024 Loss of Buying Power study, this increase would fall significantly short of covering the rising costs for seniors. The study shows that retirees would need an additional $370 per month to maintain the same buying power they had in 2010.

Additionally, the estimate does not account for any potential increases in Medicare Part B premiums.

Calculator: Social Security COLA

• See current potential payments using the Social Security Administration's benefits quick calculator.
• See the North State Bank's calculator to adjust for inflation.

The current forecast is an increase of 2.57% for 2025.

Who will receive final round of payments in August?

The Social Security Administration is preparing to distribute the final round of payments for August.

• Retired Workers Under Social Security : Payments remain for those born between the 21st and 31st of the month; Payments will be distributed on Wednesday.
• Supplemental Security Income (SSI) Recipients : September payments will be distributed early on Friday, due to the 1st of the month falling on a weekend.
• Social Security Disability Insurance (SSDI) Recipients : Same schedule applies as for retired workers, with payments distributed based on birth dates. The only remaining payments are for those born between the 21st and 31st of the month; payments will be distributed Wednesday.
• Special Considerations : Retirees who retired before May 1997 and SSI recipients generally receive their payments on the first of the month or the last business day prior when it falls on a weekend or national holiday.

How much money does Social Security distribute?

Payments vary due to several factors, including the number of years worked, the total amount of Social Security taxes paid in and the retirement age.

• Retired Workers : Approximately $1,907 per month
• Retired Couples (filing jointly) : Around $3,303 per month
• Survivor Benefits : Average of $1,509.50 per month
• Spouses of Retired Workers : Average of $910 per month
• Children of Retired Workers : Average of $892.39 per month
• SSI Beneficiaries (Individuals): Average of $943 per month
• SSI Beneficiaries (Couples): Average of $1,415 per month

This article originally appeared on Austin American-Statesman: Will Social Security COLA go up in 2025? Benefits likely to increase with cost of living