The Social Security Administration (SSA) announced a 2.5% Cost-of-Living Adjustment (COLA) in August 2025, boosting average benefits by $50/month for 72.5 million retirees.
For our clients here at Davenport & Associates, this adjustment is a key factor in retirement income planning.
If you’re asking “When should I claim Social Security?” or “Do you have enough to retire?”, this blog explores the 2025 COLA, its implications, and strategies to maximize your benefits.
The COLA is an annual SSA adjustment to combat inflation, based on the Consumer Price Index for Urban Wage Earners (CPI-W).
Common Question & Answer: “What is the Social Security COLA for 2025?” – 2.5%, increasing average benefits from $1,907 to $1,957/month, or $600/year.
Stat: This affects 72.5 million, with payments starting January 2026.
The 2.5% boost adds $600/year for average retirees, but with inflation at 3.2%, it may not fully cover rising costs.
Common Question & Answer: “How does the 2025 COLA affect retirement income?” – It increases payments but lags inflation, requiring diversification.
| Strategy | How It Works | 2025 Tip |
|---|---|---|
| Delay Claiming | Wait to 70 for 8% annual increase | Boosts average $1,957/month by 24%. |
| Spousal Benefits | Claim 50% of partner’s benefit | For couples, coordinate for max $2,914/month. |
| Work Credits | Earn more with delayed retirement | Add 8% for delaying past 66. |
| Diversify Income | Combine with IRAs/401(k)s | Offset COLA shortfalls with Roth conversions. |
Common Question & Answer: “When should I claim Social Security in 2025?” – Delay to 70 if healthy, for 76% more than at 62.
With the 2.5% COLA lagging inflation, proactive planning is key.
Common Question & Answer: “How to boost retirement income with Social Security COLA 2025?” – Delay claiming and diversify.
Contact Davenport & Associates for a free consultation or take our retirement readiness quiz to see where you stack up!