The long awaited 2025 cost of living adjustment (COLA) number for Social Security benefits in 2025 has been announced. Just as the Bureau of Labor Statistics (BLS) estimated, the final figures were released on Thursday, October 10 and thanks to a myriad of experts making predictions, most retirees were well prepared for the news of a 2.5 percent increase in their benefits.

While the adjustment will be significantly smaller than the 3.2% increase in 2024 and even lower than the 8.7% boost provided in 2023, it will still help recipients cover their daily expenses as prices continue to rise. And since the low number reflects a decrease in inflation, it may not be as bad as many retirees fear.

How this increase affects Social Security benefits in 2025

The formula to calculate how much more you will receive is easy, and with a basic understanding of math, you can calculate it yourself by applying the 2.5% increase to your current benefit amount.

To do this, you must multiply your current payment by 25 and then divide by 100 which will give you the exact amount of the increase. Then, you must add this increase to your current benefit to find out the total amount of your new payment.

A real-life example to demonstrate, a retired worker receiving the average Social Security payment for 2024 of $1,920.48, will receive an increase in benefits of approximately $48.01. After adding both numbers, your new total payment will be $1,968.49 per month.

This increase may be small, but the COLA is only meant to help beneficiaries keep up with inflation, not increase their checks in a significant way that would significantly improve their economic situation. While it could be argued that the increases come after the inflation has happened and thus the hemorrhage of money from savings has already occurred and replenishing them will never be an option, the reality of the situation is that Social Security benefits, especially retirement benefits were never meant to replace 100% of the earnings of a worker, just about 40%.

Retirement benefits are not the only ones that have increased thanks to the new COLA. All benefits distributed by the Social Security Administration (SSA) have done so, and by the same percentage. Spouses of retired workers are entitled to 50% of their partner’s benefit, so the average spousal benefit will be of $932.52 per month and the eligible children of a retired worker will get $915.00.

For those receiving survivor benefits, which include children and spouses of deceased workers, children of a deceased worker will have a new average monthly payment of $1,131.18, while widowed spouses will be entitled to $1,318.31 on average each month. Nondisabled widows and widowers will receive $1,829.17, and disabled widows and widowers will get $950.90 per month. Parents of deceased workers will also see their benefits rise, with their new monthly payment being $1,660.08. Disability Insurance beneficiaries will receive on average $1,578.42 per month, while their spouses or main caretakers will get $432.12. The dependent children of disabled workers will see their benefits increase to $504.33 per month.

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Supplemental Security Income (SSI) recipients will receive around $715.97 per month for adults, and children under the age of 18 will see their monthly benefits rise to $841.22. Recipients aged 65 and older will get a new average of $589.45 per month.
As a quirk in the SSI payment distribution, the first payment of 2025 will actually be deposited into beneficiaries’ bank accounts on Tuesday, December 31, 2024. SSI benefits are typically distributed on the first of every month, but payments are changed to the previous day when banks are open in cse of a holiday or weekend, and the 1st of January is a National Holiday.

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