Social Security 2025 COLA estimates: What to know

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Early estimates indicate that Social Security’s cost-of-living adjustment could be somewhere around 3% in 2025. Here’s what that would mean for your benefits.

In 2024, Social Security and Supplemental Security Income (SSI) recipients saw a 3.2% increase in their benefits due to an annual cost-of-living adjustment (COLA) based on inflation rates. 

Social Security benefits provide people with an income when they retire or can’t work due to disability. 

John and other VERIFY readers are wondering if Social Security’s COLA for 2025 is expected to be significantly higher than it was in 2024. 

THE QUESTION

Is Social Security’s 2025 cost-of-living adjustment (COLA) expected to be significantly higher than it was in 2024?

THE SOURCES

THE ANSWER

This is false.

No, Social Security’s cost-of-living adjustment (COLA) for 2025 is not expected to be significantly higher than it was in 2024.

WHAT WE FOUND

The Social Security Administration (SSA) adjusts benefit amounts every year to account for inflation through a cost-of-living adjustment (COLA). SSA will announce the 2025 COLA in October.

The 2025 COLA is expected to be somewhere around 3%, based on two Social Security experts’ early estimates. That means the next COLA is currently expected to be similar to the 3.2% increase in 2024, which amounted to about $50 more per month on average for retirees.

The nonprofit Senior Citizens League’s most recent estimate for the 2025 COLA is 2.66%. Mary Johnson, a retired Social Security and Medicare policy analyst for the Senior Citizens League, expects that the 2025 COLA will be 3.2%.

These estimates are based on the latest inflation data through April 2024, which means they are subject to change in the coming months.  

The current estimates for the 2025 COLA are also slightly higher than the average COLA over the last 20 years, which is about 2.6%, SSA data show

How the COLA is calculated

The COLA is calculated based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), an inflation gauge measured by the U.S. Bureau of Labor Statistics (BLS). It measures the average change over time in the prices that workers are paying in a “basket of consumer goods and services.”

The CPI-W dipped slightly from 3.5% in March to 3.4% in April, BLS data show. 

SSA explains on its website that the COLA is equal to the percentage increase in the CPI-W from the third quarter average of the previous year to the same average from the current year. If there is an increase, it’s rounded to the nearest tenth of a percent. That same increase is applied to monthly Social Security payments. 

To determine the 2025 COLA, SSA will compare the CPI-W for July, August and September of 2023 to the same period in 2024.

That’s why experts caution that the final 2025 COLA may differ from their current estimates, since SSA will not use inflation data from the first and second quarters of 2024 to make its determination. 

COLAs for the SSI program, which provides monthly payments to adults and children with a disability who have limited incomes and resources, are generally the same as those for Social Security, though they usually take effect the month after Social Security benefit increases, SSA says on its website.  

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Social Security 2025 COLA estimates: What to know

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