Social Security payments are rising 2.67% in 2025

If you receive Social Security, your monthly payment increased by 2.67% starting in January 2025. This is the cost-of-living adjustment, or COLA, that the Social Security Administration announces each October for the following year. The 2.67% figure is smaller than the 2024 increase of 3.2%, which reflects lower inflation over the past year.

The exact dollar amount of your increase depends on what you were receiving in December 2024. Someone getting $1,500 per month would see roughly a $40 increase; someone getting $3,000 would see roughly an $80 increase. You do not need to do anything to receive this increase — it happens automatically if you are already on the rolls.

If you have not yet started collecting Social Security, this year's COLA does not directly affect you. Your future payment amount will be based on your earnings record and the age at which you claim, calculated using the COLA that is in effect when you start.

Key Takeaways

  • The 2025 COLA of 2.67% applies to all Social Security beneficiaries and took effect in January, with no action required on your part.
  • Your specific dollar increase depends on your current payment amount, and you can find the exact figure on your Social Security statement or by logging into your account online.
  • COLA is calculated annually based on inflation data from the third quarter of the previous year and announced each October.
  • If you have not yet claimed Social Security, your future benefit will reflect the COLA in effect when you start, not the 2025 increase.

How the COLA is calculated and announced

The Social Security Administration calculates COLA using the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. This index tracks price changes for food, housing, transportation, medical care, and other goods and services. The SSA looks at the average CPI-W for July, August, and September of each year and compares it to the same three months from the previous year.

If inflation has risen, beneficiaries receive a COLA. If inflation has fallen or stayed flat, there is no COLA that year — this happened in 2016 and 2010. The SSA announces the COLA figure in mid-October, giving beneficiaries and the public two months' notice before it takes effect on January 1.

The 2025 COLA of 2.67% was announced on October 10, 2024. It reflects the inflation that occurred between the third quarter of 2023 and the third quarter of 2024, a period when prices rose more slowly than they had in 2022 and 2023.

Where to find your new payment amount

Your new 2025 payment amount appears on your Social Security statement, which you can view online through your personal account at ssa.gov. To access it, you will need to create a login using your email address, or use an existing account if you already have one set up.

You can also call the Social Security Administration at 1-800-772-1213 (TTY 1-800-325-0778) to ask about your specific payment. Have your Social Security number ready. Wait times are typically shorter early in the morning or later in the afternoon.

If you receive your payment by direct deposit, the new amount will appear in your bank account on your regular payment date in January. If you receive a check, the check amount will reflect the increase. Payment dates vary depending on your birth date; the SSA sends payments on the second, third, or fourth Wednesday of each month.

Why COLA matters for your budget

A 2.67% increase sounds modest, but it compounds over time. Someone who receives Social Security for 20 years will see their total lifetime benefit grow significantly because each year's COLA becomes the base for the next year's calculation. However, a smaller COLA also means that if you are already struggling with expenses, the increase may not keep pace with your actual costs.

Medical expenses, housing, and utilities often rise faster than the overall inflation rate that COLA measures. If you spend a large share of your Social Security check on healthcare or rent, the 2.67% increase may not cover your actual cost increases in those categories. This is why some beneficiaries find that their purchasing power — what their money can actually buy — does not grow as much as the percentage suggests.

The COLA is the same for all beneficiaries, regardless of age or how long you have been receiving payments. It applies to retirement benefits, survivor benefits, and disability benefits equally.

What happens if you have not claimed yet

If you are not yet receiving Social Security, the 2025 COLA does not change your decision about when to claim. Your benefit amount will be calculated based on your lifetime earnings and the age at which you start. The COLA that is in effect when you claim will be applied to your first payment.

Claiming earlier (as early as age 62) gives you a smaller monthly payment but more total payments over your lifetime if you live to an average age. Claiming later (up to age 70) gives you a larger monthly payment but fewer total payments. The COLA applies to whichever amount you receive, so the timing of your claim affects the base amount to which future COLAs are applied.

If you are deciding when to claim, focus on your life expectancy, your need for income now versus later, and whether you are still working. The COLA increase does not change these factors.

COLA and taxes on Social Security

If your total income is high enough, part of your Social Security benefit may be subject to federal income tax. The 2.67% increase in your Social Security payment could push you into a higher tax bracket or increase the portion of your benefit that is taxable, depending on your other income sources.

The income thresholds that determine whether your Social Security is taxed have not changed since 1984 and are not adjusted for inflation. This means that over time, more beneficiaries find themselves paying tax on their benefits even though the thresholds have not moved. A larger Social Security payment makes this more likely.

If you are concerned about how the increase affects your tax situation, consider speaking with a tax professional or calling the IRS at 1-800-829-1040. You can also adjust your tax withholding on your Social Security payment by contacting the SSA.

Frequently Asked Questions

Do I need to do anything to get the 2025 increase?

No. If you are already receiving Social Security, the increase is automatic and takes effect in January 2025. You will see it in your payment without taking any action.

What if I think my payment amount is wrong?

Check your Social Security statement online or call 1-800-772-1213 to verify your amount. If you believe there is an error, the SSA can review your earnings record and payment calculation. Keep records of your earnings history to support any dispute.

Will the COLA increase affect my Medicare premiums?

Medicare Part B and Part D premiums are held harmless for most beneficiaries, meaning your premium cannot increase by more than your Social Security COLA increase. However, some higher-income beneficiaries pay higher premiums and are not protected by this rule. Check your Medicare statement for your specific situation.

Can I get a larger increase if I claim later?

Yes, but not from COLA. If you delay claiming past your full retirement age, your benefit grows by roughly 8% per year until age 70. This is separate from COLA and is a permanent increase to your base benefit amount.

How often does the COLA change?

COLA is calculated and announced every year in October, based on inflation data from the previous year. The amount varies depending on inflation; some years there is no COLA at all if inflation is flat or negative.