2025 Social Security Cost of Living Adjustment

When we get to the end of the year, it’s time to look ahead to what numbers may change in 2025 for the government programs from which our clients receive benefits.  It starts with the Social Security Administration, which announces its cost of living adjustment (COLA).  Other government programs then adjust their numbers, often using the same COLA as Social Security.  Since inflation hit a 40 year high in 2022,  the rate has dropped.  After a COLA of 8.7% in 2023, the adjustment dropped to 3.2% for 2024.

Inflation, has continued to decline this year and consequently so has the COLA.  For 2025 Social Security payments will increase by 2.5%.  This bump up will be first be seen in January, 2025 monthly payments.

Medicare numbers will also change next year, although not tied to the same adjustment.  Similar to last year, the standard Medicare Part B premium that most people pay will increase. While that number has not yet been finalized, it is anticipated to increase by almost 6% to $185 per month..  Certain Medicare deductibles and copays will increase next year.  The Part A hospitalization deductible is expected to increase by $52 to $1684 and the copay for days 61 through 90 is expected to increase from $408 to $421 per day.

Medicare covers the cost of rehabilitation in a skilled nursing but there is a copay for that as well.  The first 20 days are covered 100%.  The next 80 days have a copay, which is anticipated to increase from $208 per day in 2024 to $210.50 per day in 2025. 

Other government programs adjust their numbers annually in lockstep with Social Security by the same cost of living adjustment.  Check back here in coming weeks as we will look at those numbers as well.