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Here's how much your SSI benefits will increase in 2025

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Here's how much your SSI benefits will increase in 2025

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If you receive Social Security benefits, the good news is that the cost of living adjustment (COLA) will increase in 2025, meaning you'll get a few more dollars in Social Security benefits.

The bad news is that the increase is smaller than in recent years.

For example, the COLA rate was 3.2 percent in 2024 and 8.7 percent in 2023.

Here's how much the COLA rate will increase in 2025.

What is the COLA rate for 2025?

According to the Social Security Administration, the 2025 cost of living adjustment for Social Security benefits and SSI payments is set at 2.5 percent.

This means recipients will likely see an increase of around $50 per month.

When will I see the COLA increase?

You will receive the increased benefits in the last payment cycle of the year.

“Social Security benefits will increase by 2.5 percent beginning in December 2024 and will be payable in January 2025,” according to the Social Security Administration’s COLA website. “Federal SSI payment levels will also increase by 2.5 percent beginning in January 2025.”

How is COLA calculated?

COLA is based on the percentage increase in the consumer price index for urban wage earners and office workers from July to September of last year compared to the same three months of the current year. CPI-W tracks the overall inflation rate, but may vary slightly.

Why hasn't COLA kept pace with inflation?

The CPI-W doesn't accurately reflect where retirees spend most of their money.

It measures inflation that occurs among working adults under 62, rather than most retired adults, she said. Younger working consumers spend their money differently than older Medicare enrollees.

For example, economists estimate that younger workers spend about 7% of their budgets on health care, but research and surveys have shown that older adults, on average, spend 15% or more of their income on health care.

Additionally, healthcare costs continue to rise faster than overall inflation. In the 12 months to September, medical care services rose 3.6% and hospital care services rose 4.5%, compared with overall inflation of 2.4%.

Damon C. Williams is a Philadelphia-based journalist covering trending topics in the Mid-Atlantic region.

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