Millions of Americans rely on Social Security benefits for their survival. Over time, inflation has caused prices to skyrocket, but the earning capacity of an ordinary American has remained unchanged. The same goes for social security. However, there might be relief in sight.
Social Security beneficiaries will see some unexpected monthly payments beginning in June 2025. The average monthly benefit is expected to cross $2,000 for the first time since 1983, the beginning of the program.
The increase is the result of the government’s response to inflation and cost-of-living pressures. This aims to help older Americans maintain financial stability during their retirement years.
The Social Security Administration (SSA) has announced a 2.5% Cost-of-Living Adjustment for 2025. COLA is a calculation that increases income or benefits to combat inflation. It also aims to maintain purchasing power.
It’s 0.7 percentage points less than the 2024 COLA, which was 3.2%, and significantly lower than the blockbuster 8.7% raise beneficiaries received in 2023.
Guess who was President when we had the best increases in SS.. BIDENhttps://t.co/qTBeJMks7o— Doc (@Doc13415157) May 22, 2025
SSA has calculated this annual increase based on inflation data. Consumer Price Index for Urban wage earners and Clerical Workers supply the data for this calculation, and the time period considered is the third quarter of the previous year.
For 2025, the increase is just 2.5%. This increase is smaller than the 3.2% COLA in 2024 and the historic 5.9% increase in 2023. Yet, it still shows the government’s effort to make sure that Social Security benefits actually help retirees with their day-to-day expenses.
Americans now expect inflation to soar 6.5% within the next year, the highest reading since November 1981 🚨🚨 pic.twitter.com/fxZk90txUX
— Barchart (@Barchart) April 28, 2025
These adjustments are important as retirees have to manage several daily expenses. These include a steady rise in rents, healthcare and insurance issues and transportation. Inflation has also made an impact on groceries.
The effects of these changes extend well beyond just higher monthly payments. Social Security is an important part of financial Security for American retirees. Nine out of ten individuals aged 65 and older rely on these benefits.
Data from the Social Security Administration indicates that nearly 22 million people were pulled out of poverty in 2023. It was due to the support provided by Social Security. These benefits are not only for retired workers but also for disabled individuals and survivors. There are similar expectations from COLA 2025 adjustments. It is assumed that it will play a pivotal role in reducing poverty and economic hardship among older Americans.
In April 2025, the SSA’s Monthly Statistical Snapshot report was released. It showed that approximately 69.378 million people are receiving Social Security benefits. These include retired workers, who make up 76% of the total beneficiaries. It also highlights that the retirees are the centre beneficiaries.
How many of you are barely surviving on social security? How many of you still have to work can’t retire?
A 67 year old woman just received her social security she was given 1500 dollars a month would have made just made barely enough to live. After looking at her check she saw…— Victor Bigham 🇺🇸 (@Ravious101) March 6, 2025
The average monthly benefit for these retired workers was $1,755.57 as of April. This figure is expected to rise significantly with the June adjustment.
There are still debates about the long-term sustainability of the Social Security program. Experts have cautioned that an urgent legislative reform is needed. In the absence of such reform, the Social Security Trust Fund may face a funding shortfall by the mid-2030s.
There have been proposals such as raising the payroll tax cap, adjusting benefit formulas, or increasing the retirement age.
But for now, the increase in benefits after the June adjustment is a welcome change for millions of people waiting for their checks.
