Social Security recipients will receive a 2.5% cost-of-living increase in 2025, less than in the past.

WASHINGTON – Millions of Social Security recipients will receive a 2.5% cost-of-living increase in their monthly checks starting in January, the Social Security Administration announced Thursday.

The cost of living adjustment, or COLA, for retirees translates into an average increase of more than $50 for retirees each month, agency officials said.

About 72.5 million people, including retirees, people with disabilities and children, receive Social Security benefits.

But even before the announcement, retirees expressed concern that the increase would not be enough to stem rising costs.

Sherri Myers, an 82-year-old retiree from Pensacola City, Fla., is now hoping to get an hourly job at Walmart to help make ends meet.

I want to eat something sweet but I can’t. When I’m at the grocery store, I just skip vegetables because they’re so expensive. I have to be very picky about what I eat – even McDonald’s is expensive,” he said.

Recipients received a 3.2% increase in their benefits in 2024, after a historic increase of 8.7% in 2023, brought on by a 40-year record high.

The small increase in 2025 reflects moderate inflation.

Social Security Commissioner Martin O’Malley told the Associated Press that the upcoming increase will provide relief for recipients as inflation has slowed and the agency is serving a record number of retirees while funds are tight. very low in history.

His message to those who think that the change is not enough: “They are not wrong.”

He said: “I have heard these stories and it is difficult for the elderly, and added that “in their old age, they have to use their money to buy different types of expenses and expenses, to including prescription drugs.”

He said the regulations developed by the Biden-Harris administration should make more people see the low cost of drugs.

The agency will begin notifying recipients of their new grant money by mail beginning in early December. The revised payments to about 7.5 million people receiving Supplemental Security Income will begin on December 31.

The program is funded by payroll taxes collected from employees and their employers and is set to increase to $176,100. The maximum income subject to Social Security tax was $168,600 for 2024, up from $160,200 in 2023.

The announcement comes as the country’s social insurance plan faces severe funding shortfalls in the coming years.

The Social Security and Medicare workers’ annual report released in May said the program’s trust fund will not be able to pay full benefits starting in 2035. If the trust fund runs out, the state you will be able to pay only 83% of the planned benefits, the report. said.

AARP CEO Jo Ann Jenkins said in a statement that “there is more we need to do to ensure that older Americans can continue to rely on Social Security. AARP continues to ask Congress to take concerted action to strengthen Social Security and find a long-term solution Americans can count on.”

The presidential candidates, Democrat Kamala Harris and Republican Donald Trump, have presented similar plans on how they will strengthen Social Security.

AARP conducted interviews with Vice President Harris and former President Trump in late August and asked how the candidates would protect the Social Security Fund.

Harris said he would make up for the deficit by “making billionaires and big business pay their fair share of taxes and using that money to protect and strengthen Social Security for the long term.”

Trump said “we’re going to protect it with greatness. I don’t want to do anything to do with increasing the age. I wouldn’t do that. As you know, I’ve been there for four years and I never thought to do it. I’m not going to do anything to Social Security.”

O’Malley said there is pressure for the Social Security Administration to use a different index to calculate cost-of-living increases that measures price changes based on older adults’ spending patterns on things like health care. , food and medicine. cost.

COLA is now calculated based on the Consumer Price Index, which is a market basket of consumer goods and services. O’Malley said lawmakers advocating for the change are “advancing a very positive policy.”