Millions of retirees will see a modest boost in their Social Security checks starting in January 2025. The Social Security Administration (SSA) has announced a 2.5% Cost-of-Living Adjustment (COLA), ensuring that beneficiaries receive a slight pay raise to help keep up with inflation.
While this increase is smaller than in recent years, it still means extra cash in the pockets of retirees. If you’re 67 or older and receiving Social Security benefits, here’s what you need to know.
How Much More Money Will You Get?
On average, retirees will see about $49 more per month, bringing the typical Social Security check from $1,927 to $1,976. If you’re a married couple receiving benefits together, your monthly payment will increase by around $75, pushing the total to $3,089.
For those who earned high wages throughout their careers and waited until full retirement age to claim benefits, the maximum monthly Social Security check will be $5,108 in 2025.
Why Is the Increase Smaller This Year?
The COLA is calculated based on inflation trends, specifically using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Since inflation has cooled compared to previous years, the increase for 2025 is lower than in 2024 (3.2%) and significantly less than in 2023 (8.7%).
This means Social Security recipients won’t see as big of a raise as they did in the past couple of years. However, with inflation slowing down, everyday costs may not be rising as quickly as before.
Other Factors to Consider
While the COLA increase sounds promising, retirees should keep in mind that other expenses may go up as well. Medicare Part B premiums, for example, often rise each year, which could eat into some of the Social Security increase.
Additionally, the real value of Social Security checks depends on where you live. Areas with a higher cost of living may see the extra money disappear more quickly due to rising prices for groceries, gas, and utilities.
What You Should Do Next
If you rely on Social Security as your primary source of income, now is a great time to review your budget and make sure you’re financially prepared for the coming year. Consider checking your benefit amount on the Social Security Administration’s website to see exactly how much you’ll be receiving in 2025.
Even though the increase isn’t huge, every extra dollar counts. Planning ahead can help make the most of your benefits and ensure you stay financially secure in retirement.
