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Social Security Benefits Are Barely Rising in 2025—What You Need to Know Now

There’s good news and bad news.

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The Social Security cost-of-living adjustment (COLA) was just updated and seniors may need to plan for a lean 2025. According to new projections, retirees will get an increase of just 2.5%, which means an average monthly increase of just $48, says The Senior Citizens League (TSCL). “While 2.5% is lower than the 3.2% received in 2024, that wouldn't be far from the historical norm. The COLA has averaged about 2.6% over the past 20 years. It went as low as 0.0% in 2010, 2011, and 2016 and as high as 8.7% in 2023,” TSCL says in a press release. Here’s what you need to know about the new projections.

RELATED: 3 Changes Coming to Social Security in 2024.


Higher Cost of Living

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Expenses are going up, making it harder to survive on just Social Security. “Due to a higher cost of living, older Americans are using more and more of their income each month just to get by compared to a year ago,” TSCL says. “In TSCL's 2024 Retirement Survey, 65% of seniors reported monthly expenses of at least $2,000, up from 55% in 2023. Statistical testing shows that there's almost no chance that this gap is due to noisy survey variation. (The 2024 survey had 2,129 respondents; 2023 had 2,258 respondents.)”

Long Term Impact

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Retirees are understandably worried about what this new projection means for their Social Security benefits long-term. “Less than 50% think they have enough money to live comfortably through retirement, and nearly 90% are worried about inflation reducing the value of their savings, according to the 2024 U.S. Retirement Survey from investment manager Schroders,” says The Motley Fool.

Monthly Expenses

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Seniors are struggling to cover basic expenses, let alone discretionary spending. “A rise in monthly expenses wouldn't be much of an issue if seniors' higher expenses were going to fun activities, like activities with their grandchildren, or discretionary costs, like bucket-list vacations,” says TSCL. “However, that's not the case. Nearly 80% of senior households in the 2024 survey reported that their monthly budget for essential items like food, housing, and prescription drugs had increased over the last 12 months, with 63% saying they're worried that their income won't be enough to cover these basic costs in the coming months.”

RELATED: 5 Secrets About Your Social Security Benefits.

Lowest Rise Since 2021

Senior adult couple talk at outdoor park in spring or autumn season.iStock

The 2.5% rise is the lowest since 2021. "Ensuring that seniors have enough to feed and house themselves with dignity is a major reason why we advocate for a minimum COLA of 3%," says Shannon Benton, TSCL's Executive Director. "TSCL research shows that approximately two-thirds of seniors rely on Social Security for more than half of their monthly income, and 28% depend on it entirely."

Save For the Future

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Experts recommend smart financial planning to offset the low COLA projection. “Unfortunately, Social Security recipients have few options for recourse beyond prudent budgeting and part-time work,” says the Motley Fool. “However, two sources of additional income worth consideration are high-yield savings accounts and certificates of deposit (CDs). Interest rates are at their highest level in decades, so retirees that stash money away today should find themselves with a little extra cash in the future.”