In May 2025, the average Social Security benefit for retired workers reached a milestone, exceeding $2,000 per month for the first time in history. This achievement underscores the growing reliance on Social Security for millions of Americans’ retirement income, even as the program faces future uncertainties.
The Social Security Administration (SSA) reported that the average monthly payment to nearly 53 million retired workers was $2,002, a 4.5% increase from the previous year.
A Smaller Cost-of-Living Adjustment
Social Security payments are adjusted annually to keep pace with inflation, providing recipients with a cost-of-living adjustment (COLA) each year. For 2025, the COLA increase was 2.5%, the smallest increase since 2020. According to the SSA, the average check in May 2024 was $1,916, showing the impact of inflation and changes in the beneficiary pool.
The 2.5% COLA was based on inflation data for the period from July to September 2024. Despite its modest rise, it accounts for a portion of the overall increase in benefits. However, this year’s adjustment isn’t enough to fully shield beneficiaries from the effects of rising living costs, especially when food and healthcare costs continue to climb.
The government uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to determine the COLA, which reflects inflation trends, such as the rising prices of groceries and fuel.
Changes in Beneficiary Demographics
While the COLA plays a significant role in increasing average benefits, demographic shifts also contribute. The Social Security Fairness Act, signed into law earlier this year, expanded benefits for certain groups of beneficiaries.
This included an estimated 3 million people who receive pensions from jobs not covered by Social Security, boosting their monthly payments by an average of $360. The law’s impact was most notable for workers who had previously been excluded from Social Security benefits due to specific job pension rules.
The increase in benefit amounts also correlates with broader shifts in the workforce, such as higher lifetime earnings among some retirees and a greater number of individuals waiting until their full retirement age to claim benefits.
Moreover, according to recent trends, more people are filing for benefits earlier than expected. Experts suggest that the rise in early claims may be due to concerns about the long-term stability of the Social Security system, causing some to file before potentially facing more substantial reductions.
