In 2025, Social Security recipients in the US will see a modest increase in benefits and an extra check in November, thanks to a 2.5% cost-of-living adjustment (COLA) announced by the Social Security Administration (SSA). This increase is intended to help retired Americans and others who rely on these payments to keep up with inflation, which has moderated since recent historic highs. Although the 2.5% bump is more minor than the 3.2% increase in 2024 and a significant 8.7% increase in 2023, it is expected to provide some financial relief.
The average Social Security beneficiary will see an increase of around $48 a month, based on an average monthly benefit of $1,920. This adjustment will take effect in January 2025, and it is expected to positively impact approximately 72.5 million Americans, including retirees, people with disabilities, and children. The adjustment reflects the SSA’s mandate to adjust benefits based on shifts in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
In addition to the COLA adjustment, an extra Social Security check will be issued to some beneficiaries in November due to a scheduling quirk. Supplemental Security Income (SSI) payments are typically sent on the first of each month. However, when the first day of the month lands on a weekend or holiday, payments are issued on the previous weekday. In 2025, December 1 falls on a Sunday, prompting the November check to be sent out on November 29. This adjustment doesn’t mean beneficiaries will receive additional funds; it’s a timing issue for receiving the payments.
This scheduling nuance will also affect the first few months of 2025. January payments will be delivered on December 31, February payments on January 31, and March payments on February 28 before the schedule returns to normal in April.
Social Security is funded by payroll taxes from American workers and their employers. The maximum income subject to Social Security tax was $168,600 in 2024, up from $160,200 in 2023. For 2025, this threshold is projected to rise to $174,900, reflecting wage growth and helping to ensure continued funding for the program, which currently supports millions of Americans.
The cost-of-living adjustment aims to provide some financial relief amid continued price pressures on essentials like food, healthcare, and housing, even though the increase for 2025 is lower than in the past two years. Rising costs have significantly impacted retirees on fixed incomes, highlighting the importance of these annual COLA adjustments.
While the COLA increase will increase monthly benefits, recipients are urged to plan carefully, as inflation remains above historical averages. For many, Social Security remains a critical source of income, making these adjustments vital to maintaining financial stability. The SSA’s adjustments reflect efforts to adapt to economic trends while supporting those who rely on these benefits.
