All Social Security recipients will soon receive a raise. On Oct. 10, 2024, the Social Security Administration (SSA) announced that benefits for more than 72.5 million people will increase by 2.5% in 2025.

No change has been made to how the annual cost-of-living adjustment (COLA) is calculated since 1975. But many political leaders have wanted to revise the calculation method throughout the years — including Democratic presidential nominee Kamala Harris. Here’s how much your 2025 Social Security COLA would be if Harris had her way.

Vice President Kamala Harris. Image source: Official White House photo by Lawrence Jackson.

The COLA change Harris has supported in the past

Before Harris became vice president, she served as a U.S. senator representing California. In 2019, she signed on as a co-sponsor for the Social Security Expansion Act introduced by Sen. Bernie Sanders from Vermont.

This proposed legislation included several major Social Security reforms, and one was to change how the Social Security COLA is calculated. For nearly 50 years, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) has been used to determine the annual benefits increase. The Social Security Expansion Act, supported by Harris, called for replacing the CPI-W with another inflation metric — the Consumer Price Index for Elderly Consumers (CPI-E).

Why swap out the inflation metrics used to calculate the annual Social Security COLA? The CPI-W has been criticized in the past for not accurately reflecting the higher costs incurred by older Americans. The CPI-E (which is now known as the R-CPI-E, with the “R” standing for “research”) was designed to address this issue.

When Joe Biden selected Harris as his running mate in his 2020 presidential campaign, she supported his platform. It also included changing the way Social Security COLAs are calculated to use the CPI-E.

What the 2025 Social Security COLA would be using the CPI-E

The Senior Citizens League, a nonprofit organization that advocates for seniors, has urged Congress to pass legislation that would calculate annual Social Security COLAs using the CPI-E. Why? Replacing the CPI-W with the CPI-E could mean more money in the pockets of retirees.

A study conducted by the Congressional Research Service (CRS) earlier this year found that “switching to the R-CPI-E is generally projected to result in larger COLAs and higher Social Security benefits.” CRS estimated that using the R-CPI-E would have led to an equal or higher COLA “in all but six years since 1986.”

What would the 2025 Social Security COLA be using the R-CPI-E? Instead of a 2.5% increase, the COLA would be 3%.

The average retired worker’s monthly Social Security benefit in August 2024 was $1,920.48. A 2.5% COLA translates to a monthly increase of $48.01. If the COLA were instead 3%, the monthly increase would be $57.61. Although a difference of $9.60 doesn’t sound like a lot, an extra $115 over a year would help many retirees.

Will Harris push for the CPI-E if she becomes president?

While Harris supported replacing the CPI-W with the CPI-E as a senator and vice president, she hasn’t included the change in her proposals as a presidential candidate. Will Harris push for the CPI-E if she becomes president? It could depend on whether or not Democrats gain control of both the House of Representatives and the Senate.

Even if that doesn’t happen, the COLA calculation method could be revised in the future. With the Social Security trust funds on track to run out of money by 2035, major reforms will be needed to prevent steep benefit cuts in the future.

The political negotiations to address the program’s looming insolvency could include changes that boost benefits. Replacing the CPI-W with the CPI-E could be near the top of the list.

The $22,924 Social Security bonus most retirees completely overlook

If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.

View the “Social Security secrets” »

The Motley Fool has a disclosure policy.