The Social Security Administration has announced that more than 72.5 million Americans will see a 2.5% cost-of-living adjustment to benefit payments in 2025. This means that Social Security retirement benefits will increase by an average of about $50 per month starting in January of that year. This change comes after the cost-of-living adjustment for 2024 was 3.2%, with beneficiaries experiencing the highest increases in four decades in 2023 and 2022.
The 2.5% cost-of-living adjustment for 2025 is the lowest annual increase since 2021, when beneficiaries saw a 1.3% increase to their benefits. In recent years, the adjustments have been larger due to record high inflation rates. However, now that the pace of inflation has slowed down, the cost-of-living adjustments are more in line with the average. Over the past 20 years, Social Security’s annual benefit increases have averaged about 2.6%, according to the Senior Citizens League, a nonpartisan senior group.
The Social Security Administration first announced the change for 2025 on Thursday morning via its press office feed, and it was later confirmed by the agency to CNBC over the phone. This adjustment will provide much-needed relief to millions of beneficiaries who rely on Social Security as a crucial source of income in their retirement years. It is important for retirees to stay informed about these changes and how they may impact their financial well-being.
As a developing story, more updates may be released regarding the cost-of-living adjustment for 2025 and its implications for Social Security beneficiaries. It is recommended to stay updated on any new information that may affect retirement planning and financial strategies moving forward. Social Security plays a vital role in the lives of millions of Americans, and understanding how adjustments like these can impact benefits is essential for financial stability in retirement.
