The 2025 Social Security COLA Increase Will Be Announced Tomorrow: What to Know

The Social Security Administration is set to announce the 2025 cost-of-living adjustment increase tomorrow, and recipients will have a better idea of how much more money that will be added to the checks each month in the new year. 

While the official announcement is tomorrow, experts have been making their predictions for what the 2025 COLA increase might be for months now, so we have a decent idea of what to expect. Below are the latest predictions of what the COLA increase could be next year. We'll also answer some commonly asked questions you may have. You can also check back here for the official COLA announcement tomorrow. 

For more, don't miss the Social Security payment schedule and the SSI payment schedule.

What is the Social Security COLA?

The SSA determines the COLA from the increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers, which is a measure of the average change in prices for consumer goods and services, released monthly by the Bureau of Labor Statistics. There are other factors for determining the COLA, but it's essentially put in place to account for inflation and will increase the benefit payments for beneficiaries receiving Social Security and Supplemental Security Income.

Announced in October, the COLA goes into effect January of the following year. 

Which government benefits make adjustments using COLA?

Social Security isn't the only government benefit that is affected by the COLA. Social Security Disability Insurance, Supplemental Security Income, Medicare and Supplemental Nutrition Assistance Program (including food stamps and other programs all use COLA to account for inflation when setting benefits. 

When will the SSA officially announce the 2025 COLA increase?

The Social Security Administration typically announces the COLA increase for the following year sometime in mid-October, with the new rate going into effect in January of the new year. 

We expect the SSA to announce the 2025 COLA increase on Oct. 10, 2024. 

Lower inflation means a lower COLA increase

The Senior Citizens League, a nonpartisan advocacy group for senior citizens, has forecast a lower COLA for 2025 versus 2024's 3.2%. The League's latest predictions point to a COLA of 2.5%, which is slightly lower than its August prediction of 2.57%. 

If the 2025 COLA is 2.5%, it would translate to a $48 increase in the monthly benefit payment, bringing the average monthly total to $1,968. The League also points out that while the latest prediction is lower than the past few years, 2.5% is still within the 20-year historical average of 2.6%. 

A 2.5% increase is likely lower than desired for beneficiaries, but there's more to the story. A lower COLA is a sign of lowering inflation, which could translate to a price reduction of some of your daily essentials. 

It's also important to keep in mind that the $48 increase is for the average monthly benefit and your exact monetary bump is dependent on a few factors. For instance, for retirement benefits, if you wait until you're 70 years old before you apply, you'll get a larger monthly check versus if you apply as soon as you qualify --  at 62. 

The adjustment is closely watched by seniors because the annual COLA change is designed to help them keep up with rising costs. The annual COLA increase has been as high as 8.7% in recent years, but some say it's not enough to cover inflation. According to a Senior Citizens League survey, 69% of respondents said their household costs rose faster than the COLA last year, with costs for food and housing leading the way.

Keep in mind that these are estimates that can change every month based on the previous month's inflation rate, and although they tend to be somewhat in line with the official rate, they're not always spot on. 

For more, find out what to do if you never received your Social Security check and how to determine your Social Security benefits with this free tool.