Here’s how much Social Security’s projected cost-of-living adjustment (COLA) could increase for 2025

We’re about a week away from the 2025 Cost of Living Adjustment (COLA) announcement. All recipients will soon be able to estimate how much their checks will increase next year with the new benefit amounts taking effect in January.

Of course, much of the focus is on how much more retired workers will receive next year, but those claiming spousal benefits also have bigger checks on the way. However, the latest forecasts suggest that wider budget changes may be needed for 2025.

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COLA 2025 will likely be around 2.5%

The latest estimates from The Senior Citizens League (TSCL) put the 2025 Social Security COLA at about 2.5%. This is 0.7% less than COLA 2024. This is due to cooling inflation. There’s a small chance the COLA could be higher, depending on where September’s inflation data comes in, but that’s unlikely.

A 2.5 percent COLA would increase the average retired worker’s benefit from $1,920 per month in August 2024 to $1,968 per month — an increase of $48. If your current benefit is more than that, you’ll likely see your checks grow even more. On the other hand, if you have a lower benefit, you will receive less.

Spousal Social Security benefits are usually lower than retired worker benefits simply because of the formula used to calculate them. At most, they are worth half of the workers benefit at full retirement age (FRA). The average spousal benefit, as of August 2024, is $910 per month. A 2.5% COLA would add about $23 a month, bringing the new average to somewhere around $933 a month in 2025.

Together, a couple receiving the average retired worker benefit and the average spousal benefit would receive $71 more per month with a 2.5% COLA. That’s another $852 annually.

Looking to 2025

We won’t know the true COLA 2025 until October 10th. The Social Security Administration will share the news on its website. Once you know what that is, you can estimate your 2025 checks by adding the COLA percentage to your existing checks. This could be off by a dollar or two, but it should be pretty close.

If you’re still not sure how much you’ll get, keep an eye out for a personalized COLA notification coming your way in December. Those with my social security accounts should be able to access the notification at the beginning of the month. You will also receive a notification by mail.

Compare your new monthly Social Security income to your average monthly expenses. Your checks may not go as far as you expected. Many believe that COLAs do not actually help benefits keep up with inflation as they should.

To combat this, you may need to rely on other sources of retirement income, such as:

• Personal savings: Personal savings are the ideal Social Security supplement if you have them. You may need to increase retirement account withdrawals in 2025 to cover what Social Security doesn’t cover.
• A job: A job gives you another source of consistent monthly income in addition to your Social Security checks. This could also reduce how quickly you spend your personal savings.
• Other government benefits: If you can’t work and don’t have adequate savings, you may be eligible for other government benefits to help with things like food, housing, utilities, and healthcare. These programs generally have income requirements and application processes can take time, so it’s best to look into them as soon as possible if you plan to use them in 2025.

Make a plan for how you will cover your expenses before the new checks arrive. Then, after a month or two with your new benefit, review how you’re doing and make the necessary adjustments to get you through the rest of the year.