Every October, the SSA announces the “cost of living adjustment” changes for the following year to keep people’s Social Security payments preserved from inflation. The calculations are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
Recent updates on the 2025 Social Security COLA increase suggest a 2.5 percent increase for the upcoming year. Seniors usually await these adjustments; however, this time they’re a bit disappointed. We will tell you why later.
First, let’s discuss the COLA for the 2025 Social Security increase, all the changes that take effect in January, and the next steps you can take to plan your finances accordingly.
What is the COLA increase for 2025?
The 2025 COLA is going to be 2.5 percent. Social Security and SSI beneficiaries will automatically receive this raise in their monthly benefits.
You must have received an e-mail as well. You will also get a newly designed single-page notice, entailing all necessary details like the benefit amount and dates, in simpler language.
If you don’t have an account to collect these benefits yet, you can make one here.
Some seniors showed concerns about the lower increase as compared to last year’s 3.2 percent. Keeping in mind the rising living costs and higher expenses for everyday items right now, this increase does not seem to be enough. More on this later.
How many benefits will I receive?
The monthly aid you receive depends on how much you’ve earned and worked throughout your life. An easy way to calculate it is by filling in these details in the Benefits Calculator.
Based on the COLA for 2025 Social Security, the average monthly benefit for retired workers will rise from $1,927 to $1,976.
For married people, an average hike to $3,089 from $3,014 is predicted.
You may skip to the section that discusses all the changes coming from the Social Security COLA increase in 2025 or continue reading.
Why the 2025 COLA increase may disappoint seniors
The 2025 Social Security COLA increase has disappointed some seniors. This is because this year’s adjustment is the lowest yet. Such a small increment is due to inflation slowing down.
However, inflation has been rising for 2 consecutive months, reaching 2.7 percent, and is expected to continue doing so until 2.9 percent. Although the upsurge in the price of goods is going to be lesser, it doesn’t take away from the fact that the existing costs are high.
Consumers already feel that the prices of everyday items are 22.1 percent higher than pre-coronavirus. Therefore, it is advised to keep your budget in check for some time.
Who will benefit the most?
The COLA increase for 2025 is not just for disabled people. Nearly 72.5 million Americans are estimated to gain from the adjustment.
68 million retirees will experience an increase of about $50, and nearly 7.5 million SSI recipients (disabled people) will see a 2.5 percent increase in their monthly payments.
Furthermore, the Senate voted to advance the “Social Securities Fairness Act.” This means that 3 million public sector workers can expect a fair calculation of their benefits soon.
Budgeting tips for maximizing the COLA increase in 2025
While the COLA increase for 2025 may bring some relief, it is not good enough to sustain the high cost of living. Planning your finances is the only effective way to sustain the decreased adjustment this year. Here’s what you can tick off.
There is no one-size-fits-all when it comes to budgeting. Even when emergencies do arise, a lack of emergency funds or falling short on cash shouldn’t scare you. There are options available apart from relying entirely on the government’s adjustments.
If you find yourself in a tricky situation where you need money instantly and don’t have a way to manage it, personal loans can save the day.
There are plenty of online lenders who offer cash advances right away (sometimes within an hour or a day—MyPayDayLoansOnline, for example).
The best part is that documentation is minimal, often cutting out credit score checks. You can later repay them easily in fixed monthly installments at lower rates of interest.
What changes are coming to Social Security in 2025?
There are a lot of improvements coming to Social Security in 2025 apart from just the increase in COLA. We’ve summed up the key takeaways:
- COLA increase for 2025 will be 2.5 percent.
- The full retirement age for Social Security has increased to 67.
- Earnings required for a quarter of coverage are $1,810.
- Maximum Taxable Earnings amount rose to $176,100.
- The monthly SGA for non-blind individuals is now $1,620.
- For blind individuals, the SGA is $2,700 per month.
- SSI monthly payment for 2025 will be $967.
For more details, you can read from the sources mentioned below.
Cost of Living Adjustment Information for 2025
Federal Register Determinations
That was everything on the 2025 Social Security COLA increase. Planning your budget is better than running out of money in the face of an emergency. But even if you do have to tackle such a situation, personal loans from online lenders are a safe, quick way to get funds.
