The Social Security Administration (SSA) is approaching the date when benefits will increase based on the cost of living adjustment (COLA), an increase that is intended to help recipients of retirement payments, Supplemental Security Income (SSI), and Social Security Disability Insurance (SSDI), do not lose purchasing power compared to last year’s inflation.
The COLA increase is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures changes in the cost of goods and services from year to year. If inflation rises, the COLA will too, meaning beneficiaries will receive an increase in their payments to help offset the higher cost of living.
In 2024, the COLA gave 3.2%, that is, that was the percentage that monthly payments increased for the millions of beneficiaries supported by the SSA throughout the United States.
COLA Increase Estimates: How Much Will Social Security Benefits Grow in 2025?
As we said before, the COLA increase was created by law and is intended to prevent Social Security beneficiaries from losing purchasing power in the face of inflation.
The issue worth highlighting is that the COLA increase not only impacts Social Security benefits, but also affects other federal benefits, such as the Medicare affordable healthcare program, or the Supplemental Nutrition Assistance Program (which includes food stamps and other programs), which could also be threatened by inflation.
What Could Be the COLA Increase in 2025? This Is What the Experts Say
Not every year the COLA increase is the same, because inflation is a different economic circumstance each time, influenced by current events.
Although in 2024 the increase was 3.2%, there have been years without increases or with increases as high as 8.7%, and in between, all kinds of oscillating values. This is the list of COLA increases for the last 10 years:
- 2004: 2.7%
- 2005: 2.7%
- 2006: 4.1%
- 2007: 3.3%
- 2008: 2.3%
- 2009: 5.8%
- 2010: 0.0% (There was no increase)
- 2011: 0.0% (There was no increase)
- 2012: 3.6%
- 2013: 1.7%
- 2014: 1.5%
- 2015: 1.7%
- 2016: 0.0% (There was no increase)
- 2017: 0.3%
- 2018: 2.0%
- 2019: 2.8%
- 2020: 1.6%
- 2021: 1.3%
- 2022: 5.9%
- 2023: 8.7%
- 2024: 3.2%
Predictions for 2025 are quite sober, with forecasts ranging from 2.57% to 2.63%. That is, for every $1,000 a beneficiary receives, their next check will come with a maximum of $26.30, at most.
However, keep in mind that these are just predictions, because the Social Security Administration (SSA) typically announces next year’s increase after the second week of October, when it has all the data needed to make a decision.
If you are a Social Security beneficiary, you can find all the information you need in our specialized section for each of the benefits, retirements, Social Security Disability Insurance (SSDI), and Supplemental Security Income (SSI).
Maximum Social Security Payments as of 2024
In 2024, the maximum monthly amount of Social Security Disability Insurance (SSDI) has increased to $3,822, up from the maximum of $3,627 in 2023. However, the average SSDI benefit is significantly lower, standing at approximately $1,489.26 per month.
This amount varies depending on the beneficiary’s average lifetime earnings before becoming disabled. The SSA sets the maximum benefit based on factors such as inflation, annual COLA, and wage growth trends.
On the other hand, in 2024, the maximum monthly payment of the federal Supplemental Security Income (SSI) program is $943 for an eligible person and $1,415 for an eligible couple, with an amount of $472 for an essential person.
As for Social Security, the maximum benefit that can be received in 2024 is $4,873 per month or $58,476 per year. However, reaching this amount requires having deferred benefits until age 70 and having earned the maximum taxable amount, which is $168,600 in 2024, for at least 35 years.