If you’re an SSI (Supplemental Security Income) recipient, you’ll likely notice an extra boost in your payment before 2024 ends.
On the flip side, retirees won’t see the 2025 COLA (Cost of Living Adjustment) reflected in their payments until January. This timing difference has many retirees scratching their heads, but the reason behind it is simple.
It all boils down to how the Social Security Administration (SSA) schedules payments, and holidays play a big role.
Timing
The key difference between SSI and Social Security retirement payment schedules is influenced by the holiday calendar. SSI payments are usually scheduled on the 1st of every month, but when that day falls on a holiday or a weekend, the payment is moved earlier. In this case, January 1, 2025, is a federal holiday, so the SSA will send SSI payments out a day early on December 31, 2024.
Social Security retirement benefits, however, are distributed according to a different schedule. Payments are staggered based on the recipient’s birth date. The first group will receive theirs on January 3, 2025, with others getting paid on January 8, 15, and 22.
This means that while SSI recipients get their boosted 2025 payment at the very end of 2024, retirees will have to wait until their scheduled dates in January.
Why the Early SSI Payment?
The reason for the early SSI payment comes down to practicality. January 1 is a federal holiday, meaning no payments can be processed that day.
As a result, the SSA moves SSI payments to the last business day before the holiday, which in this case, is December 31. Retirees’ payments, on the other hand, are unaffected by the holiday because their schedules are spread out across the month.
While SSI recipients receive their payments early, it’s important to note that they aren’t getting any extra money in 2024. It’s simply a timing adjustment. Retirees might feel like they’re waiting longer, but it’s essentially a matter of a few extra days.
What to Expect from the 2025 COLA Increase?
Both Social Security retirement and SSI recipients will benefit from the 2025 COLA adjustment. The COLA increase is designed to help benefits keep pace with inflation, ensuring that recipients maintain their purchasing power.
As it stands, the Senior Citizens League has projected a COLA increase of around 2.5% for 2025. While this is lower than some previous years, it’s still significant for those relying on these payments.
To give you a better idea of how this increase could affect your payments:
| 2024 Payment | 2025 Payment (2.5% COLA increase) |
|---|---|
| $943 (SSI max) | $966 |
| $1,415 (married couple SSI max) | $1,450 |
A 2.5% increase might not seem like a lot, but it can add up over the course of the year. For instance, if you receive the maximum SSI payment of $943, a 2.5% boost would give you an additional $23 a month. For eligible married couples receiving the maximum amount of $1,415 in 2024, the new 2025 payment could rise to $1,450.
Why is the COLA Necessary?
The COLA adjustment ensures that Social Security and SSI benefits continue to reflect changes in the cost of living. Inflation, which increases the cost of essential goods and services, can erode the buying power of fixed income recipients.
Without the COLA, recipients could struggle to keep up with rising prices for everything from groceries to healthcare.
Even though the projected COLA increase is modest for 2025, it still offers some much-needed relief to seniors and those with disabilities. With rising prices continuing to be a concern, every little bit helps.
Key Takeaways
- SSI Recipients Benefit Early: Due to a holiday scheduling quirk, SSI recipients will get their first COLA-adjusted payment on December 31, 2024.
- Retirees Have to Wait: Social Security retirement payments, on the other hand, are spaced out in January 2025.
- Modest Increase: The projected COLA increase for 2025 is around 2.5%, which translates to about $23 extra a month for most SSI recipients.
In the grand scheme of things, retirees only have to wait a few extra days to get their increase. The adjustment for SSI recipients is simply a matter of rescheduling due to a federal holiday, and it doesn’t result in anyone getting a significant financial edge over others.
FAQs
Why do SSI recipients get paid earlier in December?
SSI payments are shifted because January 1 is a federal holiday.
Will retirees miss out on the 2025 COLA increase?
No, they will receive it in their January payments.
How much will the 2025 COLA increase be?
It’s projected to be about 2.5%, though this may change.
When will retirees see the 2025 COLA increase?
Retirees will see the increase in their payments starting January 3.
What’s the maximum SSI benefit for 2025?
The maximum is projected to be $966 after the 2.5% increase.
