Social Security COLA Increased to 2.5% for 2025

The Social Security Administration has announced a 2.5% cost-of-living adjustment (COLA) for 2025, translating to an average increase of about $50 per month for nearly 68 million beneficiaries including retirees and disabled individuals. This adjustment follows a 3.2% increase in 2024 and an 8.7% rise in 2023, representing a shift toward more typical increments after years of high inflation. The COLA is based on inflation data from July, August, and September, which saw a 12-month consumer price index inflation rate of 2.4% as of September. Additionally, the taxable income limit subject to Social Security taxes will increase to $176,100 in 2025, up from $168,600 in 2024. Despite the adjustment, advocates express concerns that the increase may not sufficiently counteract ongoing high prices, particularly for essential goods and services. Recipients will receive notifications about their new benefit amounts by early December.