What is a COLA?
Legislation enacted in 1973 provides for costofliving adjustments, or COLAs. With
COLAs, Social Security and Supplemental Security Income (SSI) benefits keep pace with
inflation. Latest COLA
The latest COLA is 2.5 percent for Social Security benefits and SSI payments.
Social Security benefits will increase by 2.5 percent beginning with the December
2024 benefits, which are payable in January 2025. Federal SSI payment levels
will also increase by 2.5 percent effective for payments made for January 2025.
Because the normal SSI payment date is the first of the month and January 1 is a
holiday, the SSI payments for January are always made at the end of the previous
December.
How is a COLA calculated?
The Social Security
Act specifies a formula for determining each COLA. According to the formula, COLAs
are based on increases in the Consumer Price Index for Urban Wage Earners and Clerical
Workers (CPIW). CPIWs are calculated on a monthly basis by the Bureau of Labor
Statistics.
A COLA effective for December of the current year is equal to the percentage increase
(if any) in the CPIW from the average for the third quarter of the current year to the average for the third quarter of the last year in which a COLA became effective. If there is an increase, it must be rounded to the nearest tenth of one percent. If there is no increase, or if the rounded increase is zero, there is no COLA for the year.
COLA Computation
The last year in which a COLA became effective was 2023. Therefore the law requires
that we use the average CPIW for the third quarter of 2023 as the base from which
we measure the increase (if any) in the average CPIW. The base average is
301.236, as shown in the table below.
Also shown in the table below, the average CPIW for the third quarter of 2024 is
308.729. Because this average exceeds 301.236 by 2.5 percent,
the COLA effective for December 2024 is 2.5 percent. The COLA calculation, with the result rounded to the nearest
onetenth of one percent, is:
(308.729  301.236)
/ 301.236 x 100 = 2.5 percent.

CPIW for— 
2023 
2024 
July 
299.899 
308.501 
August 
301.551 
308.640 
September 
302.257 
309.046 
Third quarter total 
903.707 
926.187 
Average (rounded to the nearest 0.001) 
301.236 
308.729 
