WASHINGTON (AP) — More than 70 million Social Security recipients will learn Thursday how big a cost-of-living increase they'll get to their benefits next year. In advance of the announcement, analysts predicted that the increase would be about 2.5% for 2025, smaller than increases the previous two years.
Recipients received a 3.2% increase in their benefits in 2024, after a historically large 8.7% benefit increase in 2023, brought on by record 40-year-high inflation .
The lower COLA for next year reflects the moderating inflation. About 70.6 million people participate in the Social Security program, with an average benefit of about $1,920 a month.
The AARP estimates that a 2.5% COLA would increase that by $48 a month. In advance of the announcement, retirees voiced concern that the increase would not be enough to counter rising costs.
Sherri Myers, an 82-year-old Pensacola City, Florida, retiree, is now hoping to get an hourly job at Walmart to help make ends meet. “I would like to eat good but I can’t. When I’m at the grocery store, I just walk past the vegetables because they are too expensive.
I have to be very selective about what I eat — even McDonald’s is expensive,” she said. With increased participation and fewer workers contributing, the Social Security program faces a severe financial shortfall in the coming years. The annual Social Security and Medicare trustees report released in May said the program’s trust fund will be unable to pay full benefit.