Military retirees and disabled veterans will receive a 2.5% increase in their monthly pay through 2025, thanks to the annual Cost of Living Adjustment (COLA), tied to inflation.

While 2.5% seems low compared to recent years’ COLA adjustments of 3.2% (2024), 8.7% (2023), and 5.9% (2022), it is still close to average of approximately 2.6% over the past ten years.

The Social Security Administration announced the COLA increase on Thursday. Most government disability benefits and pensions are required by law to increase by the same amount annually to account for the rate of inflation.

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The Department of Labor determines the annual COLA by measuring the Consumer Price Index (CPI), a measurement of a broad sample of the costs of consumer goods and expenses. The CPI is compared to the previous year; if there is an increase, this is a COLA. If there is no increase, there is no COLA and the benefits remain the same; they don’t decrease.

Military retirees

By 2025, retired military members will receive a $25 increase for every $1,000 in military retirement benefits they receive each month.

For retirees who entered military service on or after August 1, 1986 and elected the Career Status Bonus (CSB/Redux Retirement Plan), any COLA increases will be reduced by one percentage point so that they receive a smaller increase of $15 per $ 1,000 received. by 2025.

Survivors who receive survivor benefits will receive an increase in their benefits by the same amount as retirees.

Service members who retired in 2024 will receive a slightly lower COLA in 2025. Their COLA is prorated based on the quarter in which they retired (January-March, April-June, etc.). The prorated amount may also be adjusted based on when a member joined and which retirement plan they selected.

Disabled veterans and survivors

Disabled veterans will also receive an increase in their benefits in the coming year. VA disability checks will increase approximately $4.28 per month for those with a 10% rating and $93.45 for those with a 100% rating who have no dependents.

Here are the VA disability compensation rates for 2025.

Dependency and Indemnity Compensation, or DIC, benefits for surviving spouses of disabled veterans will also increase in 2025. Here are the VA Dependency and Indemnity Compensation Rates for 2025.

Other Federal Retirees and Beneficiaries

Military retirees and VA beneficiaries aren’t the only ones benefiting from the COLA increase. Public service retirees and Social Security recipients will also receive the 2.5% increase in their monthly checks.

For Social Security recipients, the increase means about $50 extra per month for the average beneficiary, according to the administration.

Related: Here is the pay increase for vets and military retirees for 2024

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