Social Security Benefits to Climb 2.5% in 2025 – The New York Times

Tens of millions of Americans receiving Social Security benefits will see their monthly check amounts increase by 2.5% next year to keep pace with inflation, the Social Security Administration announced Thursday. This increase is comparable to the average annual increase in recent decades. .

average monthly profit Retired workers' pay will increase by $49 from January to $1,976, up from the current average of $1,927. Retirees and their dependents make up the majority of the more than 72 million Social Security beneficiaries, but millions of others also benefit, including workers with disabilities, survivors of deceased workers, and low-income earners. You will receive an increase in the value of your check. additional security income program.

AARP CEO Jo Ann Jenkins said in a statement: “This adjustment will ensure older Americans receive needed relief so they can buy essentials from groceries to gasoline more affordably. means,” he said.

The cost-of-living adjustment is in line with the average annual increase of 2.6% over the past 20 years, but slightly lower than the 3.2% increase recipients received this year. It's also significantly lower than the 8.7% rise in 2023, when pandemic-related disruptions and supply shortages caused inflation to rise sharply. At the time, the Fed raised its benchmark interest rate to the highest level in decades, but has only recently begun lowering it as inflation cools.

The 2025 Social Security adjustment, known as the COLA, reflects slower inflation.

“COLAs are meant to make up for the purchasing power people have lost due to rising prices,” said Teresa Ghilarducci, a New School economist who specializes in retirement security. “That's why we want to eliminate that COLA.”

social security calculate the adjustment It uses the consumer price index for urban wage earners and office workers to measure the average inflation rate for July, August and September of this year and compares it with the same period last year.