After a long wait, the cost of living adjustment (COLA) number for 2025 has been released for Social Security benefits. The final numbers were released on Thursday, October 10, just as the Bureau of Labor Statistics (BLS) predicted. Many experts had already made predictions, so most seniors were ready for the news that their benefits would go up by 2.5%.
The increase will be much smaller than the 3.2% increase in 2024 and even less than the 8.7% increase in 2023, but it will still help people pay for their daily needs as prices keep going up. And since the low number means inflation is going down, it might not be as bad as many seniors think.
How this increase affects Social Security benefits in 2025
The formula to figure out how much more you will get is simple. If you know basic math, you can do it yourself by adding the 2.5% raise to your current benefit amount.
You need to add your current payment by 25 and then divide that number by 100. This will give you the exact amount of the rise. Next, you need to add this new amount to your current benefit to get your new payment amount.
To give you an example from real life, a retired worker whose average Social Security payment in 2024 is $1,920.48 will get an extra $48.01 in benefits. You will now pay $1,968.49 a month after putting the two numbers together.
Even though this is a small increase, the COLA is only meant to help people keep up with inflation. It is not meant to give them big raises that would make their financial situation much better. One could say that the increases happen after the inflation has already happened, so the money has already been lost from savings and can’t be replaced.
However, the truth is that Social Security benefits, especially retirement benefits, were never meant to replace all of a worker’s earnings; they were only meant to replace about 40% of them.
There are more perks than just retirement that have gone up because of the new COLA. The Social Security Administration (SSA) has done this with every benefit it has given out, and by the same amount.
People who are married to retired workers are entitled to 50% of their partner’s benefit. This means that the average spousal benefit will be $932.52 per month, and children of retired workers who are qualified will get $915.00.
Survivor benefits are given to the children and spouses of workers who have died. The new average monthly payment for children of a dead worker will be $1,131.18, and the average monthly payment for widowed spouses will be $1,318.31. Widows and widowers who are not disabled will get $1,829.17 a month, and those who are crippled will get $950.90.
The monthly payment for parents of workers who have died will also go up. It will now be $1,660.08. People who get disability insurance will get an average of $1,578.42 a month, while their spouses or chief caregivers will get $432.12. The payments for children who depend on disabled workers will go up to $504.33 a month.
Individuals who receive Supplemental Security Income (SSI) will get around $715.97 a month, and children under 18 will get up to $841.22 a month. People aged 65 and up will now get an average of $589.45 a month.
The first SSI payment for 2025 will actually be put into people’s bank accounts on Tuesday, December 31, 2024. This is because of a quirk in the way payments are made. SSI benefits are usually given out on the first of every month, but they can be changed to the day before if banks are open on a holiday or weekend. January 1 is a National Holiday, so benefits are not given out on that day.
Also See:- SSDI Update: New Social Security Disability Thresholds After the 2025 COLA