Calculate the increase in Social Security retired worker checks – Official increase for January 2025

Most workers become at least somewhat reliant on Social Security income after they retire. In order to help people who are currently on a fixed income make ends meet and keep up with inflation and the growing cost of living, it is imperative that the program undergo an annual cost of living adjustment (COLA).

Although it might seem like a small portion of the population, almost 70 million Americans get government aid in one form or another, and in 2024, 52 million pensioners will receive their retirement checks. Of the 52 million retirees, 88% believe Social Security is a necessary source of income, according to a Gallup study.

The majority of people have a fairly poor knowledge of how Social Security works, despite its popularity and the sheer number of recipients; many people think that Social Security is not inflation-proof. This may help to explain why, for the past three years, Americans have listed inflation as their top financial concern, according to the same Gallup poll.

How Social Security s annual COLA is calculated

The Social Security COLA is determined using the Consumer Price Index, which is provided by the Bureau of Labor Statistics. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is the index that is used.

Food and beverages, housing, clothing, transportation, medical care, recreation, education and communication, and other goods and services are the eight main spending categories that are used to calculate inflation. Each category is given a weight based on how it influences the particular index.

The COLA for the following year is calculated by dividing the third-quarter number (readings from July, August, and September) by the same number from the prior year. The percentage increase that results is the COLA.

Since the needs of the elderly and disabled differ from those of current workers, especially when it comes to housing and healthcare, many individuals think that the index used is insufficient to meet the expectations of seniors. The CPI-E, which employs the same categories as the CPI-W but gives greater weight to the categories in which the elderly spend the most, has been proposed for usage for years.

The 2025 COLA

The COLA for 2025, however, has been finalized. Starting in January, all Social Security benefits—not just retirement benefits—will increase by 2.5 percent.

The Social Security Administration (SSA) will notify beneficiaries in December of the precise increase in their benefits; however, as a general rule of thumb, the table below shows how the increase will impact the average Social Security benefit across all SSA-managed programs.

Beneficiary	Average Social Security Benefit (Before COLA)	Average Social Security Benefit (After COLA)	Additional Monthly Income
Retired workers	$1,924	$1,972	$48
Spouses	$910	$933	$23
Survivors	$1,509	$1,547	$38
Disabled workers	$1,542	$1,581	$39

Numerous individuals have expressed their opinion that the 2025 COLA is insufficient to address the needs of those it impacts.

There are two things to consider with that sentence. First off, benefits were never intended to make up for all of the money that an employee loses when they quit. Many people rely on benefits, which is contrary to the program’s intended purpose.

According to the second, a lower COLA indicates reduced inflation, which is a good thing.

To earn a higher COLA, the metric used to calculate it would need to change for inflation to decrease. That decision has not yet been taken by Congress.

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