Will Social Security COLA go up in 2025? Here's what Arizonans need to know about benefits

Each year, millions of Americans who rely on Social Security benefits await news of the annual cost-of-living adjustment and how it will impact benefits.

Social Security provides benefits to more than 71 million Americans, including retirees, veterans and dependents. While these benefits are initially calculated based on a worker's earnings record, these payments would lose value over time without adjustments.

To address this, legislation passed in 1973 introduced annual cost-of-living adjustments, which began in 1975 to help beneficiaries keep up with the rising costs of daily life.

The Social Security adjustment varies from year to year. The cost of living adjustment for 2024 was 3.2%. Here's everything you need to know about the estimated cost of living adjustment for 2025 and how it could impact Social Security payments.

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 a 2024 Seniors League 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 : The same schedule as for retired workers applies, with payments distributed based on birth dates. The only remaining payments are for those born between the 21st and 31st of the month; payments were expected to be distributed on 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 Arizona Republic: Will Social Security COLA go up in 2025? Here's what Arizonans need to know about benefits