The 2025 Cost-of-Living Adjustment (COLA) announced by the Social Security Administration (SSA) will provide a 2.5% increase in benefits for retirees, Supplemental Security Income (SSI) recipients, and Social Security Disability Insurance (SSDI) recipients. Here’s a breakdown of what this means for different groups:
Monthly Benefit Increases:
This Article Includes
- Retirees: The 2.5% COLA translates to an extra $50 per month. If a retiree receives an average monthly payment of $1,920, they will now get $1,968, resulting in a total annual increase of $600. However, retirees with smaller benefits (e.g., $900/month) will see a smaller increase of $22.50/month.
- SSI Recipients: With a lower maximum payment, SSI recipients will receive an additional $23 per month, totaling an annual increase of $276.
Timing of the COLA Increase:
- Retirees: The COLA increase will take effect with payments issued in January 2025 (on January 3, 8, 15, or 22, depending on the beneficiary’s scheduled payment date).
- SSI Recipients: SSI beneficiaries will receive their COLA-adjusted payment earlier, on December 31, 2024, because January 1 is a holiday, prompting the SSA to send payments in advance.
Key Considerations:
- COLA Differentials: Retirees with larger monthly benefits will see more significant financial boosts than those with lower payments.
- Schedule Adjustments: SSI payments are never scheduled on weekends or federal holidays, so only SSI recipients will see the 2.5% COLA reflected in their December 31, 2024 payment. Retirees and SSDI beneficiaries will experience the increase in January 2025.