The Social Security Administration (SSA) will soon unveil the 2025 COLA increase for millions of Americans. This increase will benefit retirees, disability, and SSI recipients in the United States.
So far, the latest 2025 COLA projection for Social Security is about 2.5% claimed the Senior Citizens League. This is a much lower increase than in the previous years, but it is higher than many COLAs in history.
What are the historical trends of COLA increases over the past decades?
The first automatic Social Security COLA was 8% in 1975, after Congress enacted the COLA provision as part of the 1972 Social Security Amendments. Prior to 1975, it took a new act of Congress each time benefits were increased.
The highest COLAs occurred in the late 1970s and early 1980s amid soaring inflation:
- 1980: 14.3%
- 1981: 11.2%
The first two decades of the 21st century saw mostly modest COLAs, averaging around 2% per year, with no benefit increases in 2010, 2011 and 2016.
In recent years, surging prices, especially for food and fuel, led to the largest COLAs since the early 1980s:
- 2022: 5.9%
- 2023: 8.7%
The 2024 COLA of 3.2% is more in line with recent inflation trends compared to the 2022-2023 spike.
Social Security COLA estimates for retirement payments
The amount of your increase may seem higher, even if it is 2.5% for all beneficiaries if you receive a large payment. For example, if you are receiving a $4,000 direct deposit in 2024, you could get $100 extra after the Cost of Living Adjustment for 2025.
So, high earners could get $4,100 in January 2025. However, if you are a low earner, your 2025 COLA boost may seem too low. For example, if you get $1,000 in 2024, your future adjusted payment will be about $1,025.
That is just 25 dollars extra per month, but think about what you could amount in 12 months if you saved it. That is a 300 increase per year. No doubt it is much better than nothing or getting a reduction.
Social Security estimates with the 2025 COLA increase, full list:
Check the possible amount after the 2.5% COLA boost that could arrive next year if projections are accurate:
- For direct deposit or check worth $500 the possible updated amount: $512 after COLA
- For direct deposit or check worth $600 the possible updated amount: $615
- For direct deposit or check worth $700 the possible updated amount: $717
- For direct deposit or check worth $800 the possible updated amount: $820
- For direct deposit or check worth $900 the possible updated amount: $922
- For direct deposit or check worth $1000 the possible updated amount: $1,025
Social Security payments higher than $1,000
- For direct deposit or check worth $1,500 the possible updated amount: $1,537 after COLA
- For direct deposit or check worth $2,000 the possible updated amount: $2,050
- For direct deposit or check worth $3,000 the possible updated amount: $3,075
- For direct deposit or check worth $3,500 the possible updated amount: $3,587