The Social Security Administration (SSA) has announced a 2.5% cost-of-living adjustment (COLA) for 2025, designed to counter inflation and rising living costs. This increase will benefit more than 72.5 million Americans, including Social Security and Supplemental Security Income (SSI) recipients. Starting in January 2025, Social Security beneficiaries will see an average monthly increase of about $50, while SSI recipients will receive their adjusted payments on December 31. Additionally, the maximum taxable earnings will rise to $176,100 to reflect the adjustments in Social Security’s financial thresholds.
The COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures changes in prices for essential goods and services. This method aims to help recipients manage inflation impacts effectively, especially critical for retirees and individuals relying on Social Security for a substantial part of their income.
The SSA will notify recipients of their updated benefits either by mail or through the my Social Security online portal, where users can also view future COLA updates. For more details, visit the SSA Website.
