The 2025 federal cost-of-living adjustment (COLA) is a scheduled increase in Social Security and Supplemental Security Income (SSI) benefits that will take effect in January 2025. The COLA is designed to help beneficiaries keep pace with rising inflation and ensure that their benefits maintain their purchasing power.
The COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures the change in prices for a basket of goods and services purchased by urban wage earners and clerical workers. If the CPI-W increases from one year to the next, the COLA will be increased by the same percentage. The COLA is capped at 8.7%, which means that if the CPI-W increases by more than 8.7%, the COLA will only be increased by 8.7%.