Social Security payments increase once per year through a cost-of-living adjustment, or COLA

Your Social Security payment goes up automatically each year if there is a COLA. The Social Security Administration calculates this raise based on inflation data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). If inflation rose during the measurement period, your benefit amount rises by the same percentage starting in January.

You do not need to do anything to receive a COLA. The SSA applies it to your account automatically. The amount of your raise depends on how much inflation occurred — some years the raise is small, and in rare years there is no raise at all if inflation was negative. You will see the new payment amount in your January benefit statement or on your my Social Security account online.

The COLA affects all types of Social Security benefits the same way: retirement benefits, survivor benefits, and disability benefits all increase by the same percentage. Supplemental Security Income (SSI) payments also receive the same raise, though the rules for how much you can earn before your payment is reduced do change slightly.

Key Takeaways

  • Social Security payments increase each January by the COLA percentage, which is based on inflation measured from July through September of the prior year.
  • You receive the raise automatically — there is no form to fill out or action you need to take.
  • The COLA amount varies year to year depending on inflation; some years the raise is less than 1 percent, and some years it is 3 percent or higher.
  • Your new payment amount appears in your January benefit statement and on your my Social Security account.
  • The same COLA percentage applies to retirement, disability, survivor, and SSI benefits.

When the COLA is announced and takes effect

The SSA announces the COLA for the coming year in October. This announcement tells you the exact percentage your payment will increase. The raise then takes effect in January, when you receive your first payment at the new amount.

The timing matters because the COLA is based on inflation data from the third quarter of the prior year — July, August, and September. So the COLA announced in October 2024 reflects inflation from July through September 2024, and that raise takes effect in January 2025. This lag means the COLA you receive in January reflects inflation that happened several months earlier.

How the COLA percentage is calculated

The SSA uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to measure inflation. This index tracks the cost of goods and services that urban workers typically buy — food, housing, transportation, medical care, and other expenses. The SSA compares the average CPI-W for July, August, and September of the current year to the same three months of the prior year.

If the index went up, your benefit goes up by that same percentage. For example, if the CPI-W rose 3.2 percent from the third quarter of the prior year to the third quarter of the current year, all Social Security benefits increase by 3.2 percent in January. If the index fell or stayed flat, there is no COLA that year — your payment stays the same.

This method means the COLA is the same for everyone on Social Security, regardless of how much you receive or when you started collecting. A person receiving $1,500 per month and a person receiving $3,000 per month both receive the same percentage raise, so the dollar amount of the raise is larger for the higher payment.

What the COLA does and does not cover

The COLA is designed to help your benefit keep pace with inflation, so your purchasing power does not shrink over time. If prices for groceries, rent, and medical care go up 3 percent, your benefit goes up 3 percent too. This means you can buy roughly the same amount of goods and services with your new payment as you could with your old one.

However, the COLA does not account for changes in your personal situation. If your rent went up more than the general inflation rate, or if your medical costs rose faster than average, the COLA may not fully cover your increased expenses. The COLA is a broad adjustment based on national inflation, not an individual assessment of your needs.

The COLA also does not change the rules for how much you can earn while receiving benefits, or how much your payment is reduced if you earn too much. Those thresholds do change each year, but they are set separately from the COLA calculation.

Checking your new payment amount

You can see your new COLA amount in two places. First, the SSA mails a benefit statement in December showing your January payment amount. Second, you can log into your my Social Security account online at ssa.gov and view your payment details there. The online account updates before the mailed statement arrives, so you can check it in early January.

If you receive your payment by direct deposit, the new amount will appear in your bank account on the third day of January (or the next business day if January 3rd falls on a weekend or holiday). If you receive a check, it will arrive in the mail around the same time, though delivery varies by location.

If the new amount looks wrong, contact the SSA directly. You can call 1-800-772-1213, visit your local Social Security office, or message the SSA through your my Social Security account. Have your Social Security number and recent benefit statement ready when you contact them.

Years with no COLA or very small raises

In most years there is a COLA, but not always. If inflation was negative or very close to zero during the measurement period, the SSA does not grant a raise. This happened in 2010, 2011, and 2016, when beneficiaries received the same payment amount as the prior year.

In other years the COLA is very small — less than 1 percent. This happened in 2017 and 2020, when the raise was 0.3 percent and 1.3 percent respectively. A small COLA means your payment goes up by a few dollars per month, which may not feel like much but still helps offset inflation.

You cannot control whether there is a COLA or how large it is — it depends entirely on inflation data that the SSA measures. You will receive whatever COLA is calculated, and you will see it reflected in your January payment.

How COLA affects your taxes and other benefits

When your Social Security payment increases due to COLA, it may affect whether you owe federal income tax on your benefits. If your combined income (adjusted gross income plus nontaxable interest plus half your Social Security benefits) exceeds certain thresholds, part of your benefit becomes taxable. A COLA raise could push you over that threshold, making some of your benefit subject to tax.

A COLA raise may also affect your Medicare premiums if you are on Original Medicare. Your Part B and Part D premiums are usually held harmless, meaning they cannot increase more than your COLA raise. However, if your income rises above certain levels, you may pay higher premiums based on income-related adjustments.

If you receive Supplemental Security Income (SSI) along with Social Security, the COLA affects both payments. SSI also has income and resource limits, and a COLA raise could affect whether you remain within those limits. The SSA will notify you if a COLA raise changes your SSI payment or your may be able to access.

Frequently Asked Questions

Can I get a COLA raise if I just started receiving Social Security?

Yes. If you started receiving benefits before January, you receive the COLA raise in January along with everyone else. If you started receiving benefits in January or later, you do not receive that year's COLA — you receive the next year's COLA when it takes effect in January.

What if I think my COLA amount is wrong?

Contact the SSA at 1-800-772-1213 or visit your local office with your benefit statement. The SSA can review your account and explain how your new amount was calculated. Keep your December benefit statement so you can compare it to your January payment.

Does the COLA explore if I am still working and receiving Social Security?

Yes. The COLA applies to all Social Security beneficiaries, whether you are working or not. However, if you are under full retirement age and earn more than the annual limit, part of your benefit may be withheld. The COLA raise does not change this rule.

Will my COLA raise affect my Medicare coverage?

A COLA raise usually does not affect your Medicare coverage itself, but it may affect your premiums. Part B and Part D premiums are typically held harmless, so they cannot increase more than your COLA raise. If your income rises above certain thresholds, you may pay higher income-related premiums.

How far back does the COLA go if I receive retroactive benefits?

If you receive back pay for months you were may have access to to benefits but had not yet received them, that back pay includes COLA raises for each year it covers. The SSA calculates your payment for each month based on the COLA that was in effect that month, so your retroactive payment reflects all the raises that occurred during the period you are owed.