The Social Security Administration (SSA) has announced the 2025 Cost-of-Living Adjustment (COLA), which will increase benefits for retirees, Supplemental Security Income (SSI), and Social Security Disability Insurance (SSDI) recipients by 2.5%.
Although this boost is smaller than the 3.2% increase in 2024, it still provides additional financial support to millions of Americans.
Who Will Receive $600 Extra Per Year from the 2025 COLA?
The 2.5% COLA means an increase of $50 per month for retirees receiving the average Social Security retirement benefit of $1,920. Over the course of a year, this increase totals $600.
Here’s how it works:
- If your current monthly retirement benefit is $1,920, after the 2025 COLA, it will increase to $1,968 per month.
- $50 extra per month translates to $600 more per year, a welcome boost for retirees, especially those with fixed or lower incomes.
However, the increase varies depending on your current benefit:
- If your benefit is lower, such as $900 per month, the COLA will increase your payment by $22.50 per month, amounting to $270 extra per year.
SSI Recipients’ Increase
For SSI recipients, who typically receive lower benefits than retirees, the COLA will add $23 per month, or $276 per year. While the increase is smaller, it still provides crucial support to those in need.
2025 COLA Payment Schedule
The 2025 COLA increase will begin with payments sent in January 2025. For retirees, the increase will appear in payments scheduled for:
- January 3, 8, 15, or 22, 2025, depending on the recipient’s birthdate.
SSI recipients, however, will receive their COLA-adjusted payment earlier, with the January 2025 payment being sent on December 31, 2024, as January 1 is a federal holiday.
Key Takeaways
- Retirees receiving an average benefit of $1,920 will get $50 extra per month, totaling $600 per year.
- SSI recipients will see a $23 per month increase, totaling $276 per year.
- The 2025 COLA will be applied starting in January 2025 for most Social Security recipients.
- SSI payments will reflect the increase starting on December 31, 2024.
FAQs
How much will Social Security payments increase in 2025?
The 2025 COLA will increase payments by 2.5%, adding $50 per month for retirees receiving the average benefit.
When will Social Security recipients see the 2025 COLA increase?
The COLA increase will be applied in January 2025 for most recipients, with SSI recipients receiving their increase on December 31, 2024.
How much extra money will retirees get in 2025?
Retirees with an average benefit of $1,920 will get an additional $600 per year, or $50 more per month, due to the 2025 COLA.
Will SSI recipients get the COLA increase earlier than retirees?
Yes, SSI recipients will receive their COLA-adjusted payment on December 31, 2024, while retirees will see the increase starting in January 2025.
How is the COLA increase calculated for Social Security?
The COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to adjust for inflation.
