The Social Security Administration (SSA) has announced a 2.5% Cost of Living Adjustment (COLA) for 2025.
This increase will affect millions of retirees, Supplemental Security Income (SSI) recipients, and Social Security Disability Insurance (SSDI) beneficiaries.
Although the 2025 COLA is lower than the 3.2% increase in 2024, it still represents an important financial boost for many Americans.
How the 2025 COLA Affects Social Security Recipients
The 2025 COLA translates into an extra $50 per month for many retirees, amounting to $600 per year in additional benefits.
However, not everyone will receive the same increase, as the exact amount depends on the size of their current monthly payment.
Who Will Receive an Extra $600 Per Year?
Retirees with a monthly Social Security benefit of approximately $1,920—which is around the average for retirees—will see their payment increase by $50 per month, raising their monthly benefit to $1,968.
Over the course of 12 months, this adds up to $600 in extra income for the year.
Here’s how the 2025 COLA affects different Social Security recipients:
- Average Retirees: If your current monthly payment is $1,920, you’ll receive $50 extra per month, or $600 more per year.
- Lower-income Retirees: If your monthly payment is $900, the 2.5% COLA will increase your monthly benefit by just $22.50, adding about $270 per year.
- SSI Recipients: SSI recipients have lower maximum payments, so they will receive about $23 extra per month, adding up to $276 more annually.
When Will the 2025 COLA Payments Be Sent?
The 2025 COLA increase will take effect with the January payments, which will be distributed on the following dates:
- January 3, 2025: For those who began receiving Social Security before May 1997, or those receiving both SSI and Social Security.
- January 8, 15, or 22, 2025: Depending on your birthdate:
- January 8: If born between the 1st and 10th.
- January 15: If born between the 11th and 20th.
- January 22: If born between the 21st and 31st.
SSI Recipients Will See the COLA Sooner
SSI recipients will receive their 2025 COLA increase earlier than retirees. Since January 1 is a federal holiday, SSI beneficiaries will get their first COLA-boosted payment on December 31, 2024.
SSA schedules the payment early because it does not issue payments on weekends or federal holidays.
- $600 extra per year will go to retirees who receive an average monthly benefit of $1,920, with a $50 increase per month.
- Lower-income recipients will receive smaller monthly increases, such as an extra $22.50 for those with a $900 monthly payment.
- SSI recipients will receive their first COLA-boosted payment on December 31, 2024.
- Retirees and SSDI recipients will see their first 2025 COLA increase in January 2025, on the 3rd, 8th, 15th, or 22nd, depending on their payment schedule.
FAQs
How much will retirees receive after the 2025 COLA increase?
Retirees receiving the average benefit of $1,920 will get $1,968 per month, an increase of $50, or $600 annually.
When will the 2025 COLA increase take effect?
The COLA increase will take effect in January 2025, with payments sent on January 3, 8, 15, or 22, depending on your birthdate.
How much extra will SSI recipients receive from the 2025 COLA?
SSI recipients will see an increase of about $23 per month, adding up to $276 annually.
Will SSI recipients receive the COLA increase earlier than retirees?
Yes, SSI recipients will receive their COLA-increased payment on December 31, 2024 due to the January 1 holiday.
How much will low-income retirees receive after the 2025 COLA?
Low-income retirees with $900 per month will see their payment increase by about $22.50 per month, or $270 per year.
