Here’s how much Social Security’s projected 2025 cost-of-living adjustment (COLA) could increase your maximum benefit today

Today’s wealthiest Social Security recipients earn $4,873 a month. That’s more than $58,000 a year, and they’ll get even more in 2025. These seniors will get the same cost-of-living adjustment (COLA) as everyone else starting in January.

COLAs are percentages, so everyone’s checks will increase by a certain percentage of their current checks. Because of this, those with the biggest checks today will also see the biggest increases in the value of the dollar. But it might get less than you imagine.

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COLA 2025 will likely be around 2.5%

The latest projections from The Senior Citizens League (TSCL) put the 2025 Social Security COLA at around 2.5%. That would add about $122 a month to the checks of those currently earning the maximum benefit, bringing them to $4,995 a month. That’s another $1,464 per year.

It’s a drop in the bucket for most who get the biggest checks possible. To claim the highest Social Security benefit, you must earn the maximum income subject to Social Security taxes ($168,600 in 2024) for at least 35 years and delay claiming Social Security until 70. It’s pretty hard to do. Most people who do are probably not hurting for money and will be able to cover their living costs regardless of where the COLA comes in.

What’s interesting about these people is that they may not be the top Social Security earners for long. The Social Security benefit formula changes each year, and the change may increase the maximum benefit slightly. Soon, a new crop of high-income, 70-year-old claimants could be getting even bigger checks. However, they won’t know how much they’ll get until the Social Security Administration announces the maximum benefit for 2025. It usually shares this information sometime around the COLA announcement.

The average COLA increase will be much less

The average monthly Social Security benefit as of August 2024 is $1,920. If you add a 2.5% COLA to that, you get $1,968 a month — a $48 increase over your current benefit. It may not be enough to cover the rising costs of retirees.

There is a small chance that the COLA will be higher than the expected 2.5%. But for that to happen, September would have to see high inflation, and inflation has actually cooled in recent months. So, if anything, the COLA will likely be slightly lower than current estimates.

Once you know the official COLA on October 10, 2024, you can estimate what your checks will be next year by adding the COLA percentage to your current checks. You’ll also receive a personalized COLA notice from the Social Security Administration in December that lists your exact benefit amount for 2025.

Once you’ve identified how much you’ll get from the program, you can plan your budget for next year. If you’re worried your paychecks won’t go as far as they currently do, you may need to explore other sources of retirement income to help you get rid of the cash. This may include a job, rental income or other government benefits.