Social Security’s 2025 COLA: Here’s how much benefits will increase for retirees ages 62 to 70

The Social Security program undergoes several changes each year to ensure that benefits keep pace with rising prices and wages. The most anticipated of these changes is the cost of living adjustment (COLA), which essentially reimburses retired workers for the previous year’s inflation.

The Social Security Administration will announce the official COLA for 2025 on Thursday, October 10, shortly after the Labor Department releases September’s consumer price index data. However, The Senior Citizens League (TSCL), a nonpartisan senior advocacy group, estimates that benefits will increase by 2.5 percent next year.

All benefits for retired workers will increase by the same percentage, but COLAs will differ in nominal dollar terms, and age is a good predictor of which retirees will receive above-average COLAs. Read on to learn more.

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Average Social Security benefit for retired workers ages 62 to 70

Social Security benefits for retired workers depend on lifetime earnings and claim age. First, income is adjusted for wage inflation and analyzed through a formula to find the Primary Insurance Amount (PIA), which is the monthly benefit a worker will receive if they claim Social Security at full retirement age (FRA).

Next, the PIA is adjusted based on the age of the claim. Workers are eligible for retirement benefits at age 62, but anyone who starts Social Security before FRA is penalized with a lower benefit, meaning they receive less than 100% of PIA. And anyone who claims Social Security after FRA is rewarded with a higher benefit, meaning they get more than 100% of their PIA. There is no advantage to claiming later than age 70.

As a result, the average retired worker’s benefit generally increases between ages 62 and 70, as shown in the chart below. The data comes from a biannual report last updated by the Social Security Administration in June 2024.

Source: Social Security Administration. Above is the average retired worker benefit in June 2024. Payment amounts have been rounded to the nearest dollar.

Retired workers at age 70 will receive the highest COLAs in nominal dollars in 2025

In June 2024, the average retiree received $1,918 from Social Security. If benefits receive a 2.5 percent cost-of-living adjustment (COLA) in 2025, that figure would increase by about $48 to $1,966 a month next year.

As mentioned, all retired workers will receive the exact same COLA in terms of percentage points. But retired workers with higher benefits will receive higher COLAs in nominal dollars, and retired workers with lower benefits will receive lower COLAs in nominal dollars. In other words, retirees with Social Security benefits that exceed $1,918 per month can expect an above-average wage increase next year.

We can also estimate the dollar value of the average nominal COLA for retired workers ages 62 to 70 using the data in the previous section.

Source: Social Security Administration. Shown above the hypothetical average benefit for retired workers based on a COLA of 2.5% in 2025. Payment amounts have been rounded to the nearest dollar.

As shown above, among the chart groups, workers retired at age 70 (in June 2024) will receive the highest COLAs in nominal dollars in 2025 simply because they already have the highest benchmark payments. Meanwhile, workers retiring at age 62 (in June 2024) will receive the lowest nominal dollar COLAs because they have the lowest base payments.

The lesson here is that deferring Social Security benefits can be a very rewarding decision. About a quarter of new retirees claim Social Security at age 62 in any given year, but statistics show that most of those people drift away. Indeed, as my colleague Katie Brockman discusses , the average worker between the ages of 45 and 62 would increase their lifetime benefit income by $225,944 if they delayed taking Social Security until age 70.

In this case, assuming benefits receive a 2.5% COLA next year, the average 70-year-old retiree will receive about $2,120 per month in 2025, which equates to $25,440 for the entire year. Meanwhile, the average 62-year-old retiree will receive about $1,344 a month in 2025, which equates to $16,128 for the entire year. The difference between these numbers exceeds $9,000.