How the 2.5% Social Security COLA Boost Affects Your Benefits

According to CNET , In early October, the Social Security Administration (SSA) officially announced the cost-of-living adjustment (COLA) for 2025, which will have a significant impact on the benefits that millions of recipients receive next year. Here’s what you need to know about this change.

Starting in January 2025, approximately 72.5 million individuals receiving Social Security benefits—including retirement, survivors, Social Security Disability Insurance (SSDI), and Supplemental Security Income (SSI)—will see a 2.5% increase in their monthly payments. This adjustment is made to keep up with inflation and ensure that beneficiaries’ purchasing power is not eroded by rising living costs.

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While the 2.5% increase is welcome news, it is smaller than the boosts of 3.2% in 2024 and 8.7% in 2023, reflecting a slowdown in inflation. The COLA is a key factor in determining how Social Security benefits are adjusted each year to match changes in the cost of living, and this year’s smaller increase signals that inflation is easing.

For those who rely on Social Security benefits, this annual adjustment helps maintain the value of their payments in line with the cost of everyday expenses.