The Social Security Administration (SSA) announced on October 10 that the Social Security cost-of-living adjustment (COLA) for benefits and Supplemental Security Income will be 2.5% in 2025, less than this year’s 3.2%. It’s the lowest adjustment since 2021, when the adjustment was 1.3%.
The SSA uses the Bureau of Labor Statistics' Consumer Price Index to help determine each year's COLA. This smaller COLA has been linked to slower inflation this year.
For example, if a social security beneficiary received $10,000 worth of benefits in 2024, their benefits would increase to $10,250 in 2025.
“The traditional formula (CPI-W) does not fully account for the impact of inflation on the goods and services seniors spend the most money on — especially health care and housing,” said Max Richtman, CEO of the National Committee to Preserve Social Security and Medicare.
The Senior Citizens League (TSCL) advocated for the COLA to be higher. “Ensuring that seniors have enough to feed and house themselves with dignity is a major reason why we advocate for a minimum COLA of 3%,” said SCL Executive Director Shannon Benton. “TSCL research shows that approximately two-thirds of seniors rely on Social Security for more than half of their monthly income, and 28% depend on it entirely.”