This article provides updates on the Cost-of-Living Adjustment (COLA) over the last few years and predictions for the coming year. You can see more on the final 2025 COLA (2.5%) below.
COLA is particularly significant for over 71 million Americans, especially retirees, as it directly affects their Social Security and Supplemental Security Income (SSI) benefits.
A higher COLA means a larger increase in benefits for Social Security recipients, which is especially crucial in an economy where the prices of goods and services are consistently rising.
According to the Social Security Administration (SSA), 90% of people aged over 65 receive some amount of Social Security benefits. More than 40% of Americans over 65 rely on Social Security for the majority of their income.
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COLA Calculation
The COLA annual increase is based on the percentage increase (if any) in the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter of the current year over the average for the third quarter of the previous year in which a COLA became effective.
The government, via the BLS and SSA, publishes the official annual cost-of-living adjustments typically in the middle of October, with changes to social security, retiree benefits and medicare effective for the subsequent year.
However trailing inflation/CPI levels can provide a strong indication of the final COLA increase, well ahead of the official release in October as discussed in the subsequent sections.
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2025 COLA Increase – 2.5 Percent
With slowing inflation the 2025 COLA increase was confirmed by the SSA to be 2.5%. This is 0.7% lower than the 3.2% increase in 2024/
The latest COLA will result in an approximately $50 increase to the average monthly retirement benefit.
The COLA updates to benefit payments will start in January.
2026 COLA Increase Projections
With inflation projected to ease further in 2025, the 2026 COLA increase is expected to be more moderate, likely around 2%.
I will post future 2026 COLA forecasts as they are released and you can subscribe to get the latest updates.
Ssi recipients are very low buget and have many people who wants to know their hmo is cleared on the 1st and after 2 years
My name is Christine Hernandez and I am on social security disability and I get 841.00 dollars a month will I be getting more benefits this year?
No. The raise is effective from Jan 2023.
I have a friend who makes $158/month in SS. This is after her COLA increase last Jan of $2. With this proposed increase she will get $4 to $5 more. Pitiful!
I wish SS would increased to a base for everyone. The amount my friend gets is a sad refection on our nation. She would feel WEALTHY if she recieved. $200 or $300.
If No COLA in 2017 Why did the house just pass this: House Passes the Veterans’ Compensation COLA Act of 2016
Veterans’ pensions and disability benefits are historically adjusted each year, upon Congressional approval, to reflect a cost-of-living adjustment (COLA) equal to the COLA for Social Security benefits. To that end, last week, the House passed H.R.5588, the Veterans’ Compensation COLA Act of 2016. Specifically, this bill would increase the rates of compensation for veterans with service-connected disabilities and the rates of dependency and indemnity compensation for the survivors of disabled veterans effective December 1, 2016. This legislation would provide for the same percentage increase made available by the Social Security Act. Our servicemembers and their families make many sacrifices for our freedoms and the Veterans’ Compensation COLA Act is one way of expressing appreciation for their service and sacrifices.
The COLA is determined by the SSA in October. The bill just links the Veterans comp increase to that rather than having Congress to approve an increase every year. But if no COLA increase then the veterans comp won’t see an increase either. But this bill is a move in the right direction as it removes the dependency on Congress to pass a raise every year.
Thanks. Fixed.