Big COLA Increases for Retirees in 10 States in 2025

Social Security beneficiaries, get ready for some good news in 2025! According to recent updates, retirees in certain states will see some of the biggest cost-of-living adjustments, or COLAs, in their Social Security benefits next year. This adjustment is designed to help maintain the purchasing power of benefits in the face of inflation.

While the official 2025 COLA figure won't be finalized until the Labor Department releases the Consumer Price Index data for September, The Senior Citizens League has estimated that the increase will be around 2.6%. This anticipated adjustment, though modest compared to recent years, will translate into significant dollar amounts for retirees living in certain states. The benefit increase will be highest in states where the median Social Security benefits are currently the largest.

Here's a look at the ten states where retirees can expect the most substantial COLA increases in 2025:

1. New Jersey – With a median benefit of $2,100, retirees in New Jersey will see the highest dollar increase, potentially around $54.60 per month if the COLA hits 2.6%.
2. Connecticut – Retirees here receive a median benefit of $2,084, translating to an expected increase of about $54.02 per month.
3. Delaware – In Delaware, where the median benefit is $2,064, the COLA would add roughly $53.66 to monthly payments.
4. New Hampshire – With a median benefit of $2,039, retirees could see an increase of about $53.03 per month.
5. Maryland – Maryland retirees will see their median benefit of $2,008 rise by approximately $52.21 per month.
6. Michigan – Retirees in Michigan, with a median benefit of $2,005, are looking at a $52.13 increase each month.
7. Washington – Here, retirees will see a median benefit of $1,992 rise by about $51.77 monthly.
8. Minnesota – In Minnesota, with a median benefit of $1,982, the expected increase would be around $51.59 per month.
9. Indiana – Indiana retirees with a median benefit of $1,952 can anticipate a monthly increase of about $50.78.
10. Massachusetts – Finally, retirees in Massachusetts, where the median benefit is $1,946, would see an increase of approximately $50.60 per month.

The reason for these higher dollar increases is straightforward: retirees in these states start from a higher baseline benefit. Since COLAs are calculated as a percentage of existing benefits, those with higher initial benefits receive larger increases in absolute terms. This means that, while the percentage increase might be the same across the board, the dollar amount of the raise will be larger for those with higher benefits.

The variance in Social Security benefits across states is often influenced by regional income levels and living costs. States with higher median incomes generally have higher median Social Security benefits, leading to larger COLA adjustments. For instance, New Jersey and Massachusetts rank high in terms of median income, which correlates with higher Social Security benefits and, consequently, higher COLA increases.

In summary, while the overall percentage increase in 2025 might seem modest compared to previous years, retirees in these ten states will enjoy a more substantial boost in their monthly benefits, thanks to the higher starting point of their benefits. This adjustment will help offset some of the effects of inflation and maintain their purchasing power.