Social Security Benefits to Increase 2.5% in 2025

The Social Security Administration (SSA) announced a 2.5% cost-of-living adjustment (COLA) for Social Security and Supplemental Security Income (SSI) recipients, effective January 2025, benefiting over 72 million Americans. This adjustment translates to an average increase of about $50 per month for nearly 68 million Social Security recipients, with SSI beneficiaries receiving their increases on December 31, 2024. The 2.5% increase is the smallest adjustment since 2021, reflecting the easing inflation rates, although it is viewed as essential for helping beneficiaries manage rising costs. The SSA will send out notifications about the new benefit amounts starting in December, along with a redesigned, simplified COLA notice. Experts, including AARP's CEO, emphasized the importance of this increase for retirees, particularly as it comes amid rising costs in essentials like groceries and gas. However, potential rising costs in Medicare could offset the benefits of this adjustment, as premiums are automatically deducted from Social Security payments.