Every year, Social Security claimants eagerly await the increase in their benefits.

Any increase is viewed as good news because most people live on a fixed income, which doesn’t mean it doesn’t increase—it simply rises from a base amount that doesn’t change, unlike salaries, which can grow very quickly. This is especially true in years like this one when people are still living with the effects of the pandemic and high inflation.

It is understandable why many retirees were dubious about the 2025 adjustment given that inflation increased more quickly than the Cost of Living Adjustment (COLA) in the first half of 2024. Sadly, those who predicted it would be low were correct; on October 10, it was declared to be 2.5%, and that figure will remain unchanged.

A smaller COLA indicates lower inflation figures, and a bigger COLA would provide the economy some breathing room—so long as it doesn’t increase again in the coming year. Experts disagree on whether this is a good or negative thing.

Everyone agrees that this rise will either increase or maintain the current level of seniors’ pensions.

The average couple receiving Social Security benefits in 2024 makes $3,014 per month, or more than $36,000 annually, according to data from the Social Security Administration. Although it’s not a horrible figure, most people’s expenses cannot be met by it.

However, Social Security benefits were only intended to cover roughly 40% of retirement expenses; the remaining amount was to be paid by a pension or retirement account.

The Social Security COLA increase

The average retired couple receiving a $3,014 monthly Social Security benefit in 2024 will enjoy a $75 boost in 2025, bringing their total check amount to $3,089, based on the 2.5% increase. Although that would be an additional $900 annually, it could not be sufficient to offset growing expenses.

A percentage of your existing benefit is the cost-of-living adjustment, or COLA. Multiply the amount you receive in 2024 by 2.5% to estimate your new benefit. In December, you can receive an official COLA notice in your Social Security account online or through the mail if you want to double-check your calculations.

In January 2025, the increase will appear on your check. The month of your birth determines the precise date of your payment:

• Born between the 1st and the 10th: Jan. 8, 2025
• Born between the 11th and the 20th: Jan. 15, 2025
• Born between the 21st and the 31st: Jan. 22, 2025

What if the COLA isn t enough?

The truth is that this increase won t cover all of the extra costs that 2024 has brought for many families, and it hasn t for a long time.Benefits have lost almost 20% of their purchasing power since 2010, according to the Senior Citizens League (TSCL), and they don’t anticipate returning to their previous level anytime soon.

This is because politicians have not agreed on any proposals to address the issue, and COLAs are calculated using the incorrect CPI for seniors. For their calculations, they don t use theCPI-E,which is more focused on healthcare and other issues that affect seniors, but instead they use theCPI-W, which is for wage earners and clerical workers in cities.

Retirees can do a few things to increase their income or savings throughout their retirement.