The Social Security Administration’s (SSA) 2025 Cost-of-Living Adjustment (COLA) will increase payments for millions of beneficiaries across Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI), and Social Security retirement.
However, the increase impacts each group differently, with retirement and SSDI recipients generally receiving more from COLA adjustments than SSI beneficiaries.
Here’s how the 2025 COLA impacts each program and why SSI recipients will see the smallest dollar increase.
Overview of Social Security Programs
- Social Security Retirement and SSDI: These benefits are funded through the SSA’s Trust Fund, which is supported by payroll taxes from American workers. Benefits are based on an individual’s earnings history and the amount they’ve contributed to Social Security.
- Supplemental Security Income (SSI): Funded by the federal government, SSI assists low-income Americans who are either disabled, blind, or 65 and older. The maximum SSI payment amounts are lower than retirement and SSDI payments.
2025 COLA Impact on SSI Recipients
SSI payments are the smallest among Social Security’s major benefits. After the 2.5% COLA adjustment, the maximum increases are:
| Recipient Type | 2024 Maximum | 2025 Maximum (after COLA) | Increase |
|---|---|---|---|
| Individual SSI Recipients | $943 | $967 | $24 |
| Married Couples on SSI | $1,415 | $1,450 | $35 |
| Essential Person | $472 | $484 | $12 |
While the 2025 COLA slightly raises SSI benefits, the increase is modest due to the lower base amounts.
SSDI and Retirement Recipients Benefit More from 2025 COLA
Retirement and SSDI beneficiaries receive a greater dollar increase from COLA adjustments due to their generally higher benefit amounts.
The 2025 COLA results in a boost of nearly $50 for average retirement recipients and around $38 for SSDI beneficiaries, compared to just $24–$35 for SSI recipients. Here’s a breakdown:
- Retirement Benefits: The average retirement benefit will increase from approximately $1,927 to $1,976, a $49 increase on average.
- SSDI Benefits: SSDI recipients, who typically receive a higher base amount than SSI recipients, also benefit more significantly from the COLA increase. Average SSDI payments are about $1,539, with high earners receiving up to $3,822. After COLA, SSDI recipients will see an average increase of around $38.
Why SSI Recipients Receive a Smaller Increase
The COLA is based on a percentage, so programs with a smaller base amount see a smaller dollar increase. Since SSI provides lower maximum payments compared to SSDI and retirement benefits, the dollar increase following a COLA adjustment will always be smaller for SSI recipients.
Summary: Which Program Gains the Most?
In 2025, the highest dollar increases from the COLA adjustment will go to retirees, followed by SSDI beneficiaries, with SSI recipients receiving the smallest boost. The following table summarizes the post-COLA impact on each type of benefit:
| Program | Average Payment (2024) | Average Payment (2025) | COLA Dollar Increase |
|---|---|---|---|
| Retirement | $1,927 | $1,976 | $49 |
| SSDI | $1,539 | Approx. $1,577 | $38 |
| SSI (individuals) | $943 | $967 | $24 |
Overall, beneficiaries with higher base payments, like retirement and SSDI recipients, gain the most from the COLA adjustment, as these programs yield more substantial dollar increases.
While SSI, SSDI, and retirement beneficiaries all benefit from COLA, those receiving retirement and SSDI payments will see more dollars added to their checks. This difference highlights the significance of benefit structure and funding sources in Social Security’s various programs.
For up-to-date details, refer to the SSA’s official COLA information.
