Social Security Announces 2.5% Cost-of-Living Adjustment for 2025, Smallest Increase Since 2021

Oct 10, 2024, 12:57 PM

The Social Security Administration (SSA) has announced a 2.5% cost-of-living adjustment (COLA) for 2025, which is the smallest increase since 2021. This adjustment reflects the cooling inflation rates and is lower than the 3.2% increase in 2024 and the 8.7% increase in 2023. The adjustment will affect approximately 72.5 million Americans receiving retirement or disability benefits, resulting in an average monthly increase of about $50, or $561 annually, starting in January. Despite the increase, some retirees argue that it won't adequately cover rising health-care costs, a significant expense for retired workers. The SSA also increased the contribution base to $176,100. AARP CEO noted the impact of the adjustment on beneficiaries.