Islamabad, Sep 13; The Social Security Administration has officially announced that the 2025 Social Security COLA increase will be set at 2.5%, offering some relief to retirees and beneficiaries.
The 2025 Social Security COLA increase at 2.5% marks a modest uptick compared to previous years, where higher inflation drove larger adjustments.
Cost-of-living adjustments, or COLAs, are available to recipients of Social Security benefits each year. The goal of COLAs is to allow Social Security recipients who are elderly to keep their purchasing power as long as inflation keeps raising living expenses.
In essence, COLA is a percentage increase applied to an individual’s Supplemental Security Income (SSI) and/or Social Security benefits to offset the adverse financial impacts of factors such as price increases and inflation.
Beginning in 1975, COLA payments were issued automatically at a variable annual rate.
The annual COLA rate is typically determined by utilizing third-quarter data from a particular subset of the Consumer Price Index (CPI) published by the Bureau of Labor Statistics.
