COLA increase 2025: The latest expert forecasts have been announced

If you receive Social Security benefits, you may be looking forward to finding out what the annual COLA (cost of living adjustment) increase will be for 2025. Each year, usually in October, the Social Security Administration adjusts the monthly payment for beneficiaries to account for inflation in the form of a percentage increase.

Although we still have a month to find out what the official COLA will be for next year, experts who closely monitor inflation trends can make fairly accurate predictions in the run-up to October.

Below we'll tell you the latest projections for the 2025 COLA increase and the historical data over the years. For more information, check out four ways you can lose your Social Security benefits and how to estimate the amount of your Social Security benefits with this free online tool.

What is the Social Security COLA?

To account for the effects of inflation, welfare recipients typically receive an annual cost-of-living adjustment (COLA) with their January check. The adjustment is based on the average change in the prices of consumer goods and services over time and is set by the Bureau of Labor Statistics in the Department of Labor. The Social Security Administration sets the COLA in the third quarter of each year.

Which government benefits make benefit adjustments using COLA?

Social Security is not the only government benefit affected by the COLA. Social Security Disability, Supplemental Income Insurance, Medicare, and the Supplemental Nutrition Assistance Program (including food stamps and other programs) also use the COLA to account for inflation when setting benefits.

How high could the COLA increase be in 2025?

The COLA for 2024 is 3.2%. The Senior Citizens League – a nonpartisan senior advocacy group – is forecasting a COLA of 2.5% for 2025 after looking at monthly inflation trends this year. This is slightly lower than the August prediction of 2.57%. A 2.5% COLA increase would raise the average monthly benefit payment to $1968, an increase of $48.

The league points out that while 2.5 percent is lower than last year's 3.2 percent, the increase is not far from the historical norm and that the COLA has averaged about 2.6 percent over the past 20 years.

The adjustment is closely watched by seniors because the annual COLA change is designed to help them keep up with rising costs. And while the annual COLA increase has been as high as 8.7% in recent years, some say that's not enough to cover inflation. According to a Senior Citizens League survey, 69% of respondents said their household costs rose faster than the COLA in the last year, with food and housing costs increasing the most.

Note: The Social Security Administration typically announces the adjustment in the second week of October. The new rate takes effect the following January.

Keep in mind that these are estimates and can change each month based on the previous month's inflation rate. While they tend to be roughly in line with the official rate, they are not always exactly right.

For more information, see the materials for applying for Supplemental Security Income and our Social Security and SSDI cheat sheet.