Let’s say you’re relaxing in your most comfortable chair, the sun of the morning coming in through the window, and all of a sudden your phone vibrates with a message about the news that will change your life. Your hard-earned pension is the one you depended on throughout your retirement, and it has just been increased at the right time. In 2025, all the governments of the world are going to give more money to millions of old people to help them out with the high prices. The debates in India about how to do it are very lively, while the steady adjustments in America are very quiet. The hikes are going to be more than just numbers; they will be a mental relief as well. Here are the latest updates changing the game of retirement finance.
India’s EPS Tug-Of-War
The pensioners of the Indian Employees’ Pension Scheme (EPS-95) have made a strong demand for a minimum monthly payment hike from Rs 1,000 to Rs 7,500. The Central Board of Trustees endorsed the proposal in October 2025, which led to the optimism. However, on December 1, the Ministry of Labor put a damper on the dreams citing a fund shortage that is a roadblock to the expansions. The actuarial studies done in 2019 show that there are indeed shortfalls which make it very hard to allow for hikes unless there are some reforms.
Dearness Relief Lifeline Post-7th CPC
The good news, however, counteracts the EPS situation. The central pensioners will still be getting the Dearness Relief (DR) even after the sunset of the 7th Pay Commission which will be on December 31, 2025. The DR at the moment is at 58% and that is the same as the Dearness Allowance of the staff which is given in two installments a year—namely January and July. The next DR increase will be in January 2026 and it will protect the employees against price hikes.
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US Social Security’s 2.8% Cheer
In the US, the Social Security Administration announced a 2.8% Cost-of-Living Adjustment (COLA) for 2026 on October 24, 2025. This will benefit 75 million recipients, and the average retirement checks will be increased by about $56 starting in January, which means that they will have more money in their pockets.
| Year | COLA (%) | Avg. Monthly Increase (Retirement) |
|---|---|---|
| 2022 | 5.9 | $93 |
| 2023 | 8.7 | $137 |
| 2024 | 3.2 | $50 |
| 2025 | 2.5 | $39 |
| 2026 | 2.8 | $56 |
Why These Hikes Matter Now
These changes are not only about numbers but also means lifelines for the elderly. Just think of the following as some of the effects
- Inflation Shield: Offsets 5-7% annual price creeps, preserving lifestyles.
- Equity Boost: Bridges gaps for low-wage retirees, fostering dignity.
- Economic Spark: Frees up spending, juicing local economies.
