Here’s what veterans will get for a cost-of-living increase next year

Social Security officials on Thursday announced plans for a 2.5% cost-of-living increase in benefits next year for veterans, the lowest mark for the adjustment since before the start of the COVID-19 pandemic.

The agency’s decision, based on federal estimates of private-sector wages, sets the rate of increase not only for Social Security beneficiaries but also military retirees and individuals receiving veterans benefits. The increase will go into effect in January.

In a statement, Commissioner of Social Security Martin O’Malley said the cost-of-living increase will “help tens of millions of people keep up with expenses even as inflation has started to cool.”

But the 2.5% rate is well below what retirees and beneficiaries have enjoyed in recent years. The mark was 3.2% in 2023, 8.7% in 2022 and 5.9% in 2021.

For a veteran receiving $1,500 a month in disability payouts, a cost-of-living adjustment of 2.6% would mean an extra $38 a month. In 2023, the increase meant a boost of around $48 a month for that same veteran.

About 5 million veterans and 2 million military retirees receive benefits checks each month through the Department of Veterans Affairs. Last month, lawmakers passed legislation tying the increase in those benefits to the Social Security rate, an annual requirement that is typically non-controversial.

The cost-of-living increase would apply to payouts for disability compensation, clothing allowances and dependency and indemnity benefits, as well as some other VA assistance programs.

About 68 million Americans receive Social Security benefits. Agency officials said the average beneficiary will receive a boost of about $50 a month under the adjustment.

Social Security staffers will begin notifying individuals about the changes to their benefits by mail starting in early December.