In 2025, Social Security retirees are going to see more money in their monthly benefit checks. That’s because seniors get a cost-of-living adjustment (COLA), or benefits increase, in most years — including 2025.

So, just how much extra money will the typical senior have to spend in 2025 and beyond?

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This is how big the average Social Security raise is likely to be next year

The Social Security Administration recently announced the cost-of-living adjustment that retirees will be getting next year: 2.5%. This number was calculated based on the year-over-year change in a consumer price index during the third quarter.

The formula to determine exactly how much extra you’ll get can be complicated, but you can simply estimate the difference by taking your current benefit amount and adding 2.5% to it. The average retiree is receiving a benefit check of $1,927 in 2024, so their check should increase to around $1,976. This means they’ll get about $49 more per month than they are currently receiving.

Of course, if your benefits are higher than the average, your raise will be bigger — and if they’re lower than average, your raise is going to be smaller.

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

Medicare premium increases could eat into 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 most people get Medicare premiums taken right out of their Social Security checks, and Medicare premiums are expected to increase.

Medicare hasn’t announced how much more premiums are going to be in 2025 yet, but some estimates suggest they’re likely to increase from the current $174.70 in 2024 to $185 per month in 2025. This is the increase for the typical beneficiary, while higher earners could see their premium costs increase even more.

If retirees have to pay an extra $10 or so in Medicare premiums, then the average senior will only see their Social Security checks go up $39. That adds up to $468 per year, not a large sum but still enough to help retirees cope with rising costs.

As you plan your budget in 2025, keep in mind this is the smallest annual benefits increase since 2021, so you may find you need to cut back a little if you were counting on a bigger raise next year.

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