Social Security will announce the 2025 COLA within days. Here's what to expect.

Inflation concerns weigh heavily on voters

The roughly 70 million people who receive Social Security payments will soon learn how much they'll receive in their 2025 benefit checks, with the program's annual cost-of-living adjustment (COLA) to be announced within days. 

Each fall, the Social Security Administration sets its annual COLA based on the recent rate of inflation, part of an overhaul to the program that began in the 1970s that ensures senior citizens and other beneficiaries aren't losing purchasing power in the face of rising prices. 

When will the 2025 Social Security COLA be announced?

Typically, the Social Security Administration announces its annual COLA on the same day the Labor Department releases its September inflation report, with the benefits announcement released shortly after the inflation data.

The September Consumer Price Index report is scheduled to be issued on Thursday, Oct. 10. 

What will the COLA be for Social Security in 2025? 

The 2025 cost-of-living adjustment is forecast to come in at about 2.5%, according to the Senior Citizens League (TSCL), an advocacy group for older Americans. 

That will mark the smallest COLA since 2021, when seniors received a 1.3% adjustment due to the pandemic's low rate of inflation. Because inflation surged in 2022 and 2023, Social Security provided unusually large COLAs for those years, at 5.9% and 8.7%, respectively.

Seniors received a 3.2% COLA for the current year. 

How would that impact Social Security benefits?

The average Social Security check for retirees stands at $1,907 in 2024, according to the Social Security Administration. 

If the agency announces a 2.5% COLA increase for 2025, as forecast, the typical benefit check would rise by about $48 a month, for a total of $1,955 per payment. 

What is the VA benefits COLA increase for 2025?

Earlier this month, Congress passed a new law that ties veterans' benefits to Social Security's cost-of-living  increase. Called the Veterans' Compensation Cost-of-Living Adjustment Act of 2024, the law directs the VA to increase veterans' benefits by the same inflation adjustment percentage as Social Security payments. 

"Boosting our veterans' hard-earned benefits to keep pace with the cost of living is a necessary cost of war," said Sen. Jon Tester, a Democrat from Montana who co-sponsored the bill, in a statement. 

The COLA increase for VA benefits will apply to disability payments, clothing allowances and dependency and indemnity compensation for surviving spouses and children, according to Military.com. 

Based on the Senior Citizens League's forecast, those VA benefits would increase by 2.5% next year. 

What is the current rate of inflation?

Inflation has cooled considerably after hitting a 40-year high of 9.1% in June 2022. The Federal Reserve engineered a flurry of rate hikes that have helped to drive down inflation, which stood at 2.5% on an annual basis in August — its lowest in three years.

Inflation is expected to continue to cool, with economists forecasting that the rate of price increases slipped to 2.3% in September, according to financial data firm FactSet. 

The Social Security Administration sets its annual COLA based on inflation during the third quarter, or from July through September. 

The agency takes the average inflation rate over that period from what's known as the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, which tracks spending by working Americans. Because inflation has receded during the past several months, the 2025 COLA is expected to be lower than in prior years.

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