What is COLA?
COLA stands for Cost of Living Adjustment. It is an annual increase in Social Security benefits designed to help recipients keep up with inflation. The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures changes in prices and living expenses.
How is COLA Calculated?
The SSA uses the CPI-W to calculate the COLA. The index compares the price of a basket of goods and services from one year to the next. If the index rises, benefits increase. If it falls or remains the same, benefits stay constant.
COLA Increase for 2025
For 2025, the SSA has announced a COLA increase of X.XX%. This is the largest increase in recent years and reflects the higher cost of living faced by many Americans.
Impact on Beneficiaries
The COLA increase will have a significant impact on beneficiaries. For the average retired worker, the increase will amount to approximately $XXX per month. For couples receiving benefits, the increase will be around $XXX per month.
Additional Information
- The maximum amount of earnings subject to the Social Security tax will also increase in 2025. The new limit will be $XXXXX, up from $XXXXX in 2024.
- The earnings limit for workers who are younger than full retirement age will also increase. In 2025, the limit will be $XXXXX per year, up from $XXXXX in 2024.
The 2025 COLA increase is good news for Social Security beneficiaries, who will see a significant boost in their benefits. The increase reflects the higher cost of living faced by many Americans and will help ensure that beneficiaries can maintain their standard of living. If you’re a Social Security recipient, be sure to check your benefit statement for details on how the COLA increase will affect you.