In previous years, COLA has been adjusted to keep up with inflation. However, the 2023 adjustment of 8.7% was extraordinary and driven by unprecedented economic conditions. The increases in 2024 and 2025 reflect a return to more typical levels.

For 2025, the official COLA increase is: 2.5%

The official announcement of the 2.5% increase comes in just below the latest projections recorded last quarter at 2.63%. This adjustment is more in line with historical averages, however also a bit below the 2.8% average over the past 20 years.

Looking Back: A Comparison

• 2023: 8.7% (One of the largest in decades due to severe inflation)

• 2024: 3.1% (A more typical adjustment as inflation cooled)

• 2025: 2.5% (Slightly below the 20 year average)

As you can see, 2023 was a bit of an anomaly. It responded to skyrocketing inflation driven by various economic challenges, including supply chain disruptions and labor shortages. However, 2024's increase, while still higher than the 20-year average, returned to more "normal" numbers. And 2025 looks to follow suit with a moderate 2.5%.

Why Does This Matter?

Even though 2.5% may seem small compared to 2023’s 8.7%, it’s still a critical boost for many veterans, especially in light of ongoing inflation in key areas such as groceries, healthcare, and utilities. In years where no increase occurred, such as 2010 and 2016, veterans felt the financial pressure as costs continued to rise without corresponding compensation increases.

Thankfully, even if the annual COLA increase doesn’t fully meet your financial needs, there are other ways to maximize your benefits. You can look into Special Monthly Compensations (SMCs), the annual clothing allowance, and other avenues to enhance your disability benefits, even if you’re already rated at 100%.

Stay Informed and Stay Connected

If you have any questions about your current rating or how to secure additional benefits, please don’t hesitate to reach out. Stay tuned for future videos and updates where I’ll cover strategies for increasing your VA benefits beyond the COLA adjustments, including secondary claims and special compensations.

If you prefer to ask a private question, you can email me at laura@theveteran.coach. I look forward to hearing from you! Stay safe, stay healthy, and I’ll see you next time!