Economic Indicators

US social security benefits to rise 2.5 percent in 2025

2024.10.10 10:58

(Reuters) – U.S. retirees will receive a 2.5 percent increase in their Social Security checks in 2025, the Social Security Administration said on Thursday, translating into an average of roughly $50 per month more starting in January.

The cost-of-living adjustment, also known as COLA, is tied to inflation moves. The rate for 2024 was 3.2%, reflecting higher inflation at the time.

The rate is determined by averaging together third-quarter inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

It is the smallest annual raise since 2020, when retirees received a 1.3% increase. The rate then shot up as inflation soared during the COVID-19 pandemic before the pace of price increases dissipated this year to more normalized, although still elevated, levels. The Federal Reserve targets a 2% inflation rate.

The same 2.5 percent increase will be applied to those receiving Supplemental Security Income benefits, which is designed for the elderly and people with disabilities.

© Reuters. FILE PHOTO: Senior citizens exercise together in front of the General Grant National Memorial in upper Manhattan, in New York City, U.S. June 29, 2022. REUTERS/Mike Segar/File Photo

In total, more than 72.5 million people will benefit from the increase, the Social Security Administration said in a statement.

In January, the maximum amount of earnings subject to the Social Security tax is set to rise to $176,100 from $168,600, the agency also said.



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