Social Security cost-of-living adjustment for 2025 may be 2.5%

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Social Security cost-of-living adjustment for 2025 may be 2.5%

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beneficiaries have seen higher cost-of-living adjustments in recent years, prompted by record high inflation.

Yet next year’s increase may not be as generous.

Based on new government inflation data, beneficiaries may see just a 2.5% increase to benefits in 2025, estimates Mary Johnson, an independent Social Security and Medicare analyst.

In 2024, more than 71 million Americans — including Social Security and Supplemental Security Income beneficiaries — saw a

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, according to the Social Security Administration.

A spike in inflation drove the annual benefit boost even higher in 2023, when there was an 8.7% increase, the highest in four decades. That followed a 5.9% raise in 2022, which at the time also marked a recent high.

In 2021, the cost-of-living adjustment was 1.3%.

If a 2.5% COLA goes into effect in 2025, it would be about average, according to Johnson.

Importantly, the estimate for the 2025 Social Security cost-of-living adjustment is subject to change.

The Social Security Administration is poised to announce the official increase to benefits in October. That will include new government inflation data for September. The current 2.5% estimate has about a 17% chance of increasing and a 13% chance of decreasing, according to Johnson.

The annual Social Security cost-of-living adjustment is calculated using third quarter data from a subset of the consumer price index, known as the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.  

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