What to know about the latest Social Security cost-of-living adjustment
The COLA for 2025 marked the smallest increase in years, and benefit recipients are not happy


Average monthly Social Security benefits payments do not always stay the same. Instead, they inch up slowly over time based on what's known as a cost-of-living adjustment, or COLA.
These adjustments are supposed to reflect the increased cost of living that occurs due to "inflation and rising prices in the economy," said Investopedia. However, "many weren't happy with" the COLA for 2025, which marked "the smallest increase in years," said The Motley Fool. And it seems like 2026 is not shaping up to be much better.
What is COLA and how is it calculated?
Put simply, a cost-of-living adjustment (COLA) is a "change in benefits based on changes in the prices of goods and services," said NerdWallet. These adjustments affect Social Security retirement benefits as well as Social Security Disability Insurance (SSDI) payments and Supplemental Security Income (SSI) payments.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
The Social Security Administration (SSA) is responsible for calculating these adjustments and then applying them to people's benefit payments. Its COLA calculation hinges "on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)," which is a consumer price index that "tracks how the price of consumer goods and services changes over time," said NerdWallet.
To determine if a COLA is necessary and by how much, the SSA compares the CPI-W for the third quarter of the current year with the third quarter of the last year. Increases in the average CPI-W between those periods lead to an increase in benefits, while minimal or no change, or even a decrease, results in no adjustments being made.
How much did Social Security increase in 2025?
The Social Security Administration announced a COLA of 2.5% for 2025, "which translates to an average bump of $48 in monthly Social Security benefits and raises the average check for retired workers to $1,968," said CNBC Select.
The COLA was announced in October and "Social Security recipients should have been mailed an official notice about their 2025 benefits in December," said CNBC Select. The adjustment in benefits payments will be reflected in the first check received in 2025.
What is the COLA for 2026?
While COLA for 2026 will technically not be announced until October 2025, experts are still making projections. Initially, "after the BLS released the January inflation report, [nonpartisan senior advocacy group The Senior Citizens League] was estimating Social Security checks would rise by 2.3% next year," said The Motley Fool. "But with the pace of inflation slowing, the 2026 COLA forecast has slipped to 2.2%, which is below the average annual increase since 2010."
Ultimately, said Kiplinger, "Social Security beneficiaries are in something of a catch-22 situation; there is only a big COLA when inflation is high, but low inflation, which is good for fixed incomes, means a low COLA."
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Becca Stanek has worked as an editor and writer in the personal finance space since 2017. She previously served as a deputy editor and later a managing editor overseeing investing and savings content at LendingTree and as an editor at the financial startup SmartAsset, where she focused on retirement- and financial-adviser-related content. Before that, Becca was a staff writer at The Week, primarily contributing to Speed Reads.
-
Doing the hustle: Are side gigs a sign of impending recession?
In the Spotlight More workers are 'padding their finances while they can'
-
The ambiguous legal state of ectopic pregnancy care
The Explainer Rep. Kat Cammack's accusations of 'fearmongering' are the latest example of how mixed messages are complicating the debate around abortion
-
New York plans first nuclear plant in 36 years
Speed Read The plant, to be constructed somewhere in upstate New York, will produce enough energy to power a million homes
-
The downsides of a 'forgotten' 401(k) and how to find it
the explainer Don't leave your old retirement plan behind
-
3 tips to save for a cruise this year
The Explainer The convenience of a cruise doesn't necessarily come cheap without some strategic planning
-
What are Pell Grants and who do they benefit?
The Explainer These are grants, not loans — meaning students do not have to repay the funds, but they must first meet certain conditions
-
How do your student loans affect your credit score?
The Explainer People's scores are dropping as student loan payments resume
-
Do you need flood insurance? What to know ahead of hurricane season.
the explainer Some experts recommend getting flood insurance even if you're far from the coasts
-
Average retirement savings by age: how do you stack up?
The Explainer Determine whether you're being appropriately frugal or going overboard
-
What to know about the 'no tax on tips' policy
The Explainer The new bill would make tip income exempt from federal income taxes
-
Withdrawing 529 plan funds for college? Here's what to know.
the explainer Maximize the amount you have stashed away for your education