Social Security Recipients Will Get Smaller Benefits Boost in 2025

Social Security benefits will rise by 2.5% next year, the Social Security Administration announced Oct. 10.

On average, the cost-of-living adjustment (COLA) translates to an increase of more than $50 per month, the agency said, making the estimated monthly average $1,976, up from $1,907 this year. Roughly 68 million people, including retirees and disabled workers, receive Social Security payments.

The annual COLA announced for 2025 reflects cooling inflation and is one of the lowest in recent years—lower than this year’s 3.2% jump and a far cry from the 8.7% boost seen in 2023. The announcement comes on the heels of the latest Consumer Price Index report, also out Oct. 10, which found that inflation rose 2.4% year-over-year in September.

Although inflation has cooled significantly over the past year, persistent high prices are still hitting U.S. residents—including retirees—hard.

“Social Security benefits and SSI [Supplemental Security Income] payments will increase in 2025, helping tens of millions of people keep up with expenses even as inflation has started to cool,” said Commissioner of Social Security Martin O’Malley in a statement.

The Social Security Administration also announced the 2025 wage cap. The maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $176,100, from $168,600 in 2024.

The 2.5% COLA will begin with benefits payable in January 2025. Increased payments to nearly 7.5 million SSI recipients will begin on Dec. 31. Some people receive both Social Security and SSI benefits.

The administration posted a fact sheet summarizing the 2025 COLA.