The purpose of the Cost-of-Living Adjustment (COLA) is to ensure that inflation does not erode the purchasing power of Social Security and Supplemental Security Income (SSI) benefits. It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year.
Congress enacted the COLA provision as part of the 1972 Social Security Amendments, and automatic annual COLAs began in 1975. Before that, benefits increased only when Congress enacted special legislation.
Beginning January 2025 nearly 68 million Social Security beneficiaries will see a 2.5 percent cost-of-living adjustment (COLA). This will Increase payments to nearly 7.5 million people receiving SSI beginning December 31, 2024. On average, Social Security retirement benefits will increase by about $50 per month starting in January. The COLA adjustment also includes updated figures for the SSI Federal Benefit Rate (FBR) as well as the Title II Trial Work Period (TWP), and Substantial Gainful Activity (SGA).
You will find the 2025 COLA Factsheet here.
Enhanced Communication for Beneficiaries:
Social Security beneficiaries will receive a newly designed and improved COLA notice that makes it easier for beneficiaries to find the information they need most. The simplified COLA notice is now only one page, uses plain and personalized language, and provides exact dates and dollar amounts of a person’s new benefit amount and any deductions.
Individuals who have a personal my Social Security account can view their COLA notice online, which is secure, easy, and faster than receiving a letter in the mail. People can set up text or email alerts when there is a new message, such as their COLA notice, waiting for them in my Social Security.
People will need to have a personal my Social Security account by Nov. 20 to see their COLA notice online. To start, visit www.ssa.gov/myaccount.
Additional Information:
Information about Medicare changes for 2025 will be available at www.medicare.gov. For Social Security beneficiaries enrolled in Medicare, the 2025 benefit amount will be available via my Social Security's Message Center starting in late November. Those who have not opted to receive messages online will receive their COLA notice by mail in December.
Visit Social Security’s blog for details about the COLA and other important news, and view their video to learn about our newly designed and improved COLA notice.
To read more about the Social Security Cost-of-Living adjustment for 2025 visit: https://www.ssa.gov/cola/.
For more on the National Training and Data Center, please visit: vcu-ntdc.org