Soon, the Social Security Administration (SSA) will announce the 2025 COLA raise that will affect a lot of Americans. People in the United States who are retired, disabled, or get SSI will gain from this increase.

This is the most recent COLA estimate for 2025 for Social Security. The Senior Citizens League says it is about 2.5%. This is a much smaller rise than in the past, but it is still higher than many COLAs in history.

What are the historical trends of COLA increases over the past decades?

As part of the Social Security Amendments of 1972, Congress made the COLA provision a law. The first automatic COLA for Social Security was 8% in 1975. Before 1975, every time benefits were raised, Congress had to pass a new law.

Inflation was very high in the late 1970s and early 1980s, when COLAs were the highest:

• 1980: 14.3%
• 1981: 11.2%

In the first 20 years of the 21st century, COLAs were mostly small, averaging about 2% per year. In 2010, 2011, and 2016, benefits did not go up at all.

In the past few years, rising prices, mostly for food and fuel, have caused the biggest COLAs since the early 1980s:

• 2022: 5.9%
• 2023: 8.7%

The 2024 COLA of 3.2% is more in line with recent inflation trends compared to the 2022-2023 spike.

Social Security COLA estimates for retirement payments

If you get a big payment, the amount of your raise may seem bigger, even if it’s only 2.5% for everyone. In 2024, if you get a direct payment of $4,000, you might get an extra $100 after the Cost of Living Adjustment for 2025.

In January 2025, people with a lot of money could get $4,100. If you don’t make much money, though, your 2025 COLA boost might not seem like enough. For instance, if you get $1,000 in 2024, your new payment will be about $1,025.

Even though it’s only an extra $25 a month, think about how much you could save if you did that. That’s an extra $300 a year. Without a doubt, it’s better than getting nothing or a discount.

Social Security estimates with the 2025 COLA increase, full list:

Check the possible amount after the 2.5% COLA boost that could arrive next year if projections are accurate:

• For direct deposit or check worth $500 the possible updated amount: $512 after COLA
• For direct deposit or check worth $600 the possible updated amount: $615
• For direct deposit or check worth $700 the possible updated amount: $717
• For direct deposit or check worth $800 the possible updated amount: $820
• For direct deposit or check worth $900 the possible updated amount: $922
• For direct deposit or check worth $1000 the possible updated amount: $1,025

Social Security payments higher than $1,000

• For direct deposit or check worth $1,500 the possible updated amount: $1,537 after COLA
• For direct deposit or check worth $2,000 the possible updated amount: $2,050
• For direct deposit or check worth $3,000 the possible updated amount: $3,075
• For direct deposit or check worth $3,500 the possible updated amount: $3,587

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