The Social Security Administration declares a 2.5% cost-of-living adjustment for 2025, marking the lowest increase since 2021.

• In 2025, over 72.5 million individuals will receive a 2.5% increase in their Social Security and Supplemental Security Income benefits, as announced by the Social Security Administration on Thursday.
• Beginning in January, the average Social Security retirement benefit will rise by approximately $50 per month.
• The pace of inflation has slowed down since 2021, resulting in the lowest adjustment.

In 2025, over 72.5 million Americans will receive a 2.5% increase in benefit payments, as announced by the Social Security Administration on Thursday.

According to the agency, Social Security retirement benefits will increase by approximately $50 per month on average, starting in January.

The Social Security Administration announced the change on Thursday morning through its press office feed on X and later confirmed the news to CNBC via phone.

1. Bill affecting pensioners' Social Security benefits may be voted on by the House. 2. Social Security survivor benefits may be missed out on by children. 3. 72% of Americans worry that Social Security will run out in their lifetimes.

Since 2021, the Social Security cost-of-living adjustment for 2025 is the smallest annual increase in benefits. In recent years, COLAs have been larger due to record-high inflation.

In 2023, beneficiaries experienced the highest increase in four decades with an 8.7% rise in benefits, despite a cost-of-living adjustment of only 3.2% for 2024. In 2022, they also received a 5.9% boost to their benefits.

The Senior Citizens League reports that the annual benefit increases of Social Security have averaged about 2.6% over the past 20 years.

"Jo Ann Jenkins, CEO of AARP, stated that the COLA is a crucial element of Social Security, providing older Americans with an inflation-protected source of income during retirement. This adjustment will enable seniors to obtain much-needed relief to afford essential items such as groceries and gas."

Many older Americans may struggle to pay their bills due to rising prices, as Social Security is the primary source of income for about 40% of them, according to AARP.

How to determine how big your benefit checks will be

According to Joe Elsasser, a certified financial planner and president of Covisum, current beneficiaries can estimate the potential change in their benefits by multiplying their current monthly benefit check amount by the percentage increase.

To determine the exact increase in next year's Medicare benefit, it is necessary to consider the projected rise in Medicare Part B premiums, which are typically deducted from benefit payments. The standard Medicare Part B premium is expected to increase from $174.70 in 2024 to $185 per month in 2025. However, some beneficiaries may pay higher premium rates based on their income levels.

Delaying the claim of retirement benefits from age 62 to age 70 can result in a 77% increase in Social Security benefits, which is due to cost-of-living adjustments.

According to Elsasser, the initial claim decision has the greatest influence on the amount of your payment.

The Social Security Administration will start sending out notifications of new benefit amounts to beneficiaries via mail in December.

The agency is introducing a new one-page COLA notice for 2025, which will outline the benefit amounts and any deductions, as well as the start dates for the checks.

Beneficiaries must have a My Social Security account by Nov. 20 to view COLA statements online.