How much more money will the average Social Security retiree receive in 2025?

In 2025, Social Security retirees will see more money in their monthly benefit checks. That’s because in most years, including 2025, seniors will receive a cost of living adjustment (COLA) or benefit increase.

How much extra money will the typical senior have to spend in 2025 and beyond?

This is how high the average increase in social security next year is likely to be

The Social Security Administration recently announced the cost of living adjustment that retirees will receive next year: 2.5%. This figure was calculated based on the annual change in a consumer price index in the third quarter.

The formula for determining the exact amount you will receive extra can be complicated. However, you can easily estimate the difference by taking your current benefit amount and adding 2.5% to it. The average retiree will receive a benefit check of $1,927 in 2024, so their check should increase to about $1,976. That means they’ll get about $49 more per month than they currently receive.

Of course, if your benefits are higher than average, your raise will be larger – and if they are lower than average, your raise will be smaller.

The Social Security Administration will send you a personalized COLA notice in December showing you exactly how much your benefit increase will be. Still, the calculation above gives you an estimate that is accurate enough to start planning your budget for the new year.

Medicare premium increases could affect your raise

A raise of around $49 isn’t very much for most retirees, and it’s also important to note that your checks may not even increase by the full amount of your specific COLA. That’s because for most people, Medicare premiums are deducted directly from their Social Security checks, and Medicare premiums are expected to rise.

Medicare has not yet announced how much more premiums will be charged in 2025, but some estimates say they will likely rise from the current $174.70 in 2024 to $185 per month in 2025 . This is the increase for the typical benefit recipient. For higher earners, premium costs could rise even further.

If retirees have to pay about $10 extra in Medicare premiums, the average senior’s Social Security checks will only increase by $39. That adds up to $468 a year, not a large sum but still enough to help retirees cope with rising costs.

When planning your budget in 2025, keep in mind that this is the smallest annual benefit increase since 2021. So you may have to cut back if you expect a larger increase next year.