Military retirees and disabled veterans will see a 2.5% boost to their monthly benefits in 2025, as part of the annual Cost of Living Adjustment (COLA) tied to inflation. Although this increase is lower than the adjustments in previous years—3.2% in 2024 and 8.7% in 2023—it remains close to the average 2.6% seen over the past decade.
The adjustment is determined by the Social Security Administration, using data from the Department of Labor’s Consumer Price Index (CPI), which measures changes in the cost of consumer goods and services. If there is a year-over-year rise in CPI, a COLA is applied to benefits like military retirement, VA disability, and Social Security to offset inflation’s impact.
Impact on Military Retirees
Military retirees will see a $25 increase for every $1,000 of their retirement pension each month in 2025. However, those who opted for the Career Status Bonus (CSB/Redux) plan will see smaller raises—$15 per $1,000—due to a reduced COLA.
Survivors receiving payments from the Survivor Benefit Plan (SBP) will also benefit from the 2.5% increase. For those who retired in 2024, the COLA will be prorated based on their retirement quarter.
Disabled Veterans and Survivors
Disabled veterans can expect their VA benefits to increase as well. A veteran with a 10% disability rating will receive an additional $4.28 per month, while those with a 100% rating (without dependents) will see a monthly increase of $93.45. Dependency and Indemnity Compensation (DIC) for surviving spouses will also rise accordingly in 2025.
Other Federal Retirees
Civil Service retirees and Social Security recipients will also benefit from the COLA adjustment. For Social Security beneficiaries, this will translate into an extra $50 per month on average, helping to offset rising living costs.
This increase ensures that veterans, retirees, and other federal beneficiaries continue to receive benefits that keep pace with inflation, safeguarding their financial security in the coming year.