Social Security Checks Are Increasing – See How Much More You will Get in 2025

But it is that time of year when millions of subscribers for Social Security eagerly, almost frantically, wait for the cost-of-living-adjustment (COLA) report announcement, wishing and praying for an increase to help them cover at least some of the damage by inflation. The other side of this argument is that, should the COLA increase actually be that loss, it may not be what many had hoped for. And COLA is basically an insert of some value by borrowers to the amount paid to retirees, the disabled, and other beneficiaries as a cushion to ensure that they don’t lose their purchasing power to the rise in prices.

The method to come up with the COLA is determined by the SSA in relation to the Consumer Price Index for Urban Wage Earners and Clerical Workers-what is also called the CPI-W for short-for this very specific group of workers. What is announced on October 10, 2024, by the SSA will become official, while the inflation data for the month of September from the Labor Department will finish making the announcement that gives that particular COLA for 2025.

While COLA is meant to help beneficiaries cope with rising prices, experts warn that the upcoming adjustment could bring disappointing news. The anticipated increase is expected to be one of the smallest in recent years, making it harder for retirees to maintain their standard of living.

2025 Social Security COLA Expected to Be Historically Low

The first concerning prediction about the 2025 COLA is that it is likely to be one of the smallest increases since 2021. Over the past three years, Social Security beneficiaries have enjoyed relatively large COLA increases:

• 5.9% in 2022 (following significant inflation)
• 8.7% in 2023 (one of the highest increases in decades)
• 3.2% in 2024 (a noticeable slowdown from previous years)

Nevertheless, in projections made by the Senior Citizens League (TSCL), a nonprofit group representing seniors, the COLA predicted for 2025 is approximately 2.6%. This would be quite a dip from the annual increases in recent years and might leave many Social Security recipients unable to afford their lives.

Many have long-lasting arrangements made with their finances that influence how actively they live their daily lives. What this lower COLA projection is attributed to is that inflation has eased in recent months, which, in effect, means the price increases were certainly not as sharp as those experienced in 2022 and 2023, Not that this has to mean anything good, as many retirees encounter higher living expenses of basic commodities and services of major chapters such as housing and health care.

Given that COLA is based on inflation data extending between July and September, the final figure will be confirmed after the numbers for September are released; however, with inflation trends at present, an increase higher than 2.6% is less likely.

Why the COLA Formula Fails Retirees

A major concern about COLA is that it does not accurately reflect the spending patterns of retirees. The COLA calculation is based on the CPI-W, a measure of inflation that tracks the spending habits of urban wage earners and clerical workers—a younger group that spends differently than retirees.

Younger workers tend to spend more on:
Transportation (such as fuel and vehicle costs)
Education
Work-related expenses

Retirees, on the other hand, allocate a larger portion of their budget to:

• Housing (which has been increasing at a faster rate than general inflation)
• Healthcare (where costs consistently outpace overall inflation)
• Prescription medications and medical services

Cost-of-living increases calculated using the CPI-W usually understate the actual impact on older Americans because it places heavier weight on areas like transportation and education, where costs have stabilized or regressed, and lighter weight on housing and health, which have been rising fast.

For example, during the first seven months of 2025:

• The CPI-W increased by 3.1%
• Housing costs rose by 4.5%
• Medical expenses climbed 3.2%
• Transportation costs increased by 2.8%
• Education expenses actually decreased by 0.2%

This means that while COLA may technically match inflation as measured by the CPI-W, it does not keep up with the real expenses seniors face. Over time, this problem compounds, leading to a decline in retirees’ purchasing power.

The Ongoing Loss of Purchasing Power

COLA has failed to pace with the inflation on key areas in the last 10 years, and this has led to a slow erosion of Social Security benefits, the TSCL shows. According to them, the purchasing power of Social Security benefits has declined by about 20% since 2010. This means that retiree benefits are increased somewhat every year by COLA, but the retirees are able to buy less with their checks today than they could 10 years ago. This trend is particularly concerning for seniors on fixed incomes, who have little room to absorb rising costs.

Many Social Security recipients already struggle with:

• Higher rent and home maintenance costs
• Rising prescription drug prices
• Expensive medical procedures and hospital visits
• Increased food costs, especially for fresh produce and meats

As Social Security benefits fail to fully adjust for these rising expenses, seniors may be forced to cut back on essential needs or dip into their savings—if they have any.

What Can Be Done to Improve COLA?

Many advocates are claiming that, in fact, the COLA in Social Security should be based on some more accurate measure of the inflation of retired people. One of the proposed solutions is to switch to the Consumer Price Index for the Elderly, which gives more weight to healthcare and housing.

CPI-E would provide for COLA increases outstripping those that would be called for under CPI-W during years with dramatic increases in medical and housing costs. However, this change would require the approval of Congress, and there have been some political headwinds in the way of previous attempts to reform the COLA formula.

Final Thoughts: What to Expect in 2025

For now, Social Security recipients should prepare for a modest COLA increase in 2025 – probably around 2.6%. It is better than no COLA, but it’s unlikely to sufficiently cover the rising costs of living, especially for housing and health care. As the official COLA announcement comes in October 2024, elders should monitor the inflation trends and reflect any changes in their budgets. Advocates are continuing up until now in their long pursuit of reforms that would make COLA more accurate and equitable for retirees.

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