How Small Are 2025 Social Security Increases Expected To Be?

More than 70 million Social Security recipients are waiting for the news Thursday about how much their cost-of-living increase will be for 2025.

It is expected to be lower for the second year in a row. Last year's increase was 3.2%. 2023's increase was 8.7% due to rampant inflation. The increase is tied to government inflation numbers. It's still better than 2016, the last year there was no increase.

Alicia Munnell, director of the Center for Retirement Research at Boston College, projected a 2025 adjustment of 2.5 percent to 2.6 percent, according to AARP.

"People are still not happy because prices are high," she told the organization, but "I think we're working our way out of this inflation situation and the harm that it did."

A 2.5 percent COLA would increase the average benefit for a retired worker — about $1,920 a month in August 2024 — by $48 a month starting in January 2025.

But much of the increase would be used to offset the rising cost of Medicare Part B plans, which are deducted from Social Security checks. The cost of the health plan is expected to increase 5.9% in 2025, totaling $185 monthly.

The average monthly survivor benefit would go up by a little less than $38, and the average Social Security Disability Insurance payment would tick up by $38.50.

The federal plan is chronically underfunded and is estimated to not be able to pay full benefits beginning in 2035.

It is funded by payroll taxes paid equally by workers and employees. The amount of income that is taxed under the program is capped at $174,900 in 2025. Some have advocated ending or at least raising the amount of income that is taxed to help prop up funding for the program.

Both Kamala Harris and Donald Trump have promised to help save the program but have not laid out specifics about how they would do it. Any changes to funding of the program would require Congressional approval.