Social Security COLA Update: Here's How Much the Average Benefit Will Increase in 2025

The wait is over. On Thursday, the Social Security Administration (SSA) announced the cost-of-living adjustment (COLA) for 2025. Beginning in January, more than 72.5 million Americans will receive a 2.5% increase in their benefits.

What will this adjustment mean in dollars and cents? Here's how much the average benefit will increase in 2025.

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Average Social Security benefits increase by type of beneficiary

SSA announced that next year's COLA will boost the average monthly Social Security retirement benefit by roughly $50. However, the dollar increase will vary depending on the type of beneficiary.

The most recent information on average benefits was included in SSA's monthly statistical snapshot in August. The following table shows the average benefit by type of beneficiary, along with how much those benefits will increase with the 2025 COLA of 2.5%.

Data source: Social Security Administration. Increase calculations and chart by author.

How the latest increase compares historically

Some Social Security beneficiaries might be disappointed by the amount of their increase. The 2025 COLA of 2.5% is lower than the 3.4% received this year and well below the 8.7% received in 2023.

However, it's nearly in line with the average annual Social Security benefits increase in recent years. SSA said in its update that the COLA increase has averaged close to 2.6% over the last decade.

This year's Social Security increase is also close to the average so far in the 21st century. Since 2001, the average COLA has been nearly 2.6%.

It's a different story, though, when we go back to 1975 when automatic annual COLAs were first implemented. The average Social Security benefits increase since then is almost 3.8%. Soaring inflation in the 1970s and early 1980s caused COLAs to be exceptionally high, which skewed the overall historical average.

How to find out your new benefit amount

Your monthly benefits increase isn't likely to exactly match the average for your type of benefit. However, it's easy to calculate what your new benefit amount will be in 2025. You only need to determine your current monthly benefit by going to your "my Social Security" account on SSA's website and then multiplying the number by 1.025.

If you're not in a hurry to find out your new benefit amount, SSA will begin letting beneficiaries know what their new benefits will be starting in early December. You could wait to receive your notice in the mail or view your COLA notification online via your "My Social Security" account. This account allows you to receive text or email alerts when you receive a new message.

If you turn on this feature before December, you'll be alerted when your online COLA notice is available. Note, though, that your "my Social Security" account must be set up by Nov. 20, 2024 to be able to view COLA notices online.

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