Social Security recipients, including the roughly 1.5 million living in Arizona, will receive a 2.5% cost-of-living adjustment, or COLA, starting in 2025, raising the average monthly benefit by around $48. The average payment currently stands near $1,920.
The Social Security Administration announced the new inflation increase on Oct. 10 . COLAs, which are uncommon outside of Social Security payments, help recipients keep up with rising prices for food, shelter, transportation and much more. Here’s how the new numbers might affect your finances:
What are COLAs?
They are annual benefit increases designed to “offset the corrosive effects of inflation on fixed income,” according to the Social Security Administration. The increase also applies to disabled and largely indigent retirees receiving SSI or Supplemental Security Income. Some 68 million Americans will receive COLAs on their retirement benefits and 7.5 million will get them on SSI benefits. Some people receive both, so the total number of affected individuals totals 72.5 million, the Social Security Administration said.