The Average Social Security Check Is Increasing By $48 Per Month. Here's When — and Why It's Not More.

The average Social Security payment is increasing by $48 per month next year.

The Social Security Administration announced the 2.5% cost-of-living adjustment (COLA) for 2025 on Thursday, marking the smallest increase since 2021 . The average COLA was 2.6% across the past decade, with the 2024 change at 3.2%, according to the administration .

The close to 68 million Social Security beneficiaries and almost 7.5 million people receiving Supplemental Security Income payments will see their checks increase by 2.5% on January 1, 2025, and December 31, 2024, respectively.

The increase is based on inflation across July, August, and September. The consumer price index for July showed that inflation reached a three-year low at 2.9%. August's inflation rate was even lower, at 2.5%, and September's was 2.4% . Based on lower inflation numbers, the Federal Reserve cut the federal funds rate, which impacts everything from mortgage rates to credit card interest rates, for the first time in four years in September.

Related: A Fed Rate Cut Finally Happened For the First Time in 4 Years. Here's How the Decision Will Affect Your Wallet.

How is the COLA calculated?

The COLA takes the average inflation among urban wage earners and clerical workers from July to September and calculates the difference between this year's average inflation and last year's to arrive at a percentage.

Is there another way to calculate?

Some groups don't approve of calculating the COLA as it is right now. The Senior Citizens League (TSCL) advocates basing the calculation on the CPI-E , which measures inflation for Americans ages 62 and up, instead of the CPI-W , which measures inflation among urban wage earners and clerical workers.

"This year represents another lost opportunity to grant seniors the financial relief they deserve by changing the COLA calculation from the CPI-W to the CPI-E, which would better reflect seniors' changing expenses," TSCL executive director Shannon Benton stated in a press release .

Is the COLA enough?

TSCL estimated that the average Social Security check will increase by $48 from $1,920 to $1,968. That may not be enough, says AARP CEO Jo Ann Jenkins.

"Even with this adjustment, we know many older Americans who rely on Social Security may find it hard to pay their bills," Jenkins stated in a press release . "Social Security is the primary source of income for 40% of older Americans."

Related: Are You Actually on Track to Retire Well? A Financial Expert Reveals the Critical Milestones to Hit at Every Age — Plus 3 Common Oversights.