Social Security COLA update: Here’s how much the average benefit will increase in 2025

The wait is over. On Thursday, the Social Security Administration (SSA) announced the cost of living adjustment (COLA) for 2025. Starting in January, more than 72.5 million Americans will receive a 2.5 percent increase in their benefits.

What will this adjustment mean in dollars and cents? Here’s how much the average benefit will increase in 2025.

Image source: Getty Images.

Average social security benefits increase depending on the type of beneficiary

The SSA announced that next year’s COLA will increase the average monthly Social Security retirement benefit by about $50. However, the dollar increase will vary depending on the type of beneficiary.

The most recent information on average benefits was included in the SSA’s monthly statistical snapshot in August. The following table shows the average benefit by beneficiary type, along with how much those benefits will increase with the 2025 COLA of 2.5%.

Data source: Social Security Administration. Increase calculations and chart by author.

How the most recent growth compares historically

Some Social Security recipients may be disappointed by the amount of their raise. The 2025 COLA of 2.5% is lower than the 3.4% received this year and well below the 8.7% received in 2023.

However, it is roughly in line with the average annual increase in Social Security benefits in recent years. The SSA said in its update that COLA increases have averaged nearly 2.6 percent over the past decade.

This year’s Social Security growth is also close to the average so far in the 21st century. Since 2001, the average COLA has been nearly 2.6%.

It’s a different story, however, when we go back to 1975, when automatic annual COLAs were first implemented. The average increase in Social Security benefits since then is nearly 3.8%. Rising inflation in the 1970s and early 1980s made COLAs exceptionally high, skewing the overall historical average.

How to find out your the new value of the benefit

Your monthly benefit increase is unlikely to exactly match the average for your benefit type. However, it’s easy to calculate what your new benefit amount will be in 2025. Just determine your current monthly benefit by going to your My Social Security account on the SSA website and then multiplying the number by 1.025.

If you’re not in a rush to find out your new benefit amount, SSA will begin telling recipients what their new benefits will be starting in early December. You can wait to receive the notice by email or view the COLA notice online through your “My Social Security” account. This account allows you to receive text or email alerts when you receive a new message.

If you activate this feature before December, you will be alerted when your online COLA notification is available. Note, however, that your My Social Security account must be set up by November 20, 2024 in order to view COLA notices online.