Agency increases payments for retirees and beneficiaries

Social Security recipients can expect a 2.5% increase in their payments starting in 2025 as inflation cools.

This is the smallest increase since 2021. The amount represents a total value of about $48 more per month, with average check amounts increasing from $1,920 to $1,968.

On Thursday, the Bureau of Labor Statistics reported that the 12-month consumer price index inflation rate reached 2.4% in September. The Social Security Administration calculates the annual COLA based on consumer price growth in the months of July, August, and September. In July, consumer prices rose by 2.9% year-on-year, and in August they rose by 2.6%.

Advocates for Social Security recipients have long argued that seniors have different — and more costly — spending habits that are not reflected in the current COLA determination process, which tracks a measure known as the consumer price index for urban wage earners and white-collar workers.

The pandemic has only exacerbated the problem.

“Although the inflation rate has fallen, prices for certain essential goods such as food and housing are still high,” said Mary Johnson, an independent analyst who tracks changes in the COLA.

The data supports this impression. Since 2023, an unofficial Bureau of Labor Statistics price index that measures goods and services more likely to be purchased by adults age 62 and older, known as CPI-E (for CPI “elderly”), has been rising faster than the current index, which the Social Security Administration uses to calculate its annual cost of living adjustment.