According to Vibes.okdiario , As December comes to a close, Social Security recipients are preparing to receive their final payments for the month. However, none of these payments will include the 2025 Cost of Living Adjustment (COLA) increase. The extra money from COLA will begin in January 2025, starting with payments issued on January 3.
The COLA increase will apply to all Social Security recipients, regardless of age, but the actual dollar amount each person receives will vary depending on their current benefit amount. Here’s a breakdown of how the COLA increase will impact different payment amounts.
Social Security COLA Increase Based on Payment Amount
For those receiving smaller Social Security payments, the COLA increase will be proportionally smaller. For example:
- $1,000 per month: A recipient receiving $1,000 will see a $25 increase in their monthly payment, as they will get $2.50 for every $100 they currently receive.
- $2,000 per month: If your Social Security payment is $2,000, your COLA increase will be $50 per month, which amounts to about $600 extra per year. This is closer to the average COLA increase.
On the other hand, those with lower payments will see a smaller increase:
- $500 per month: If your Social Security payment is $500, your COLA increase will be around $12.50 per month.
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Larger Social Security Payments
For retirees who have worked many years and contributed a significant amount to Social Security, the COLA increase can be more substantial. Here are some examples:
- $3,000 per month: A 65-year-old receiving a payment of $3,000 will see a $75 increase per month, adding up to $900 extra per year.
- $4,000 per month: If a retiree qualifies for a payment of $4,000 (which usually applies to high earners who have delayed filing until Full Retirement Age), they will see a $100 increase per month, or $1,200 extra per year.
It’s important to note that for those who file for Social Security benefits before reaching Full Retirement Age, their monthly payment may be reduced, and the COLA increase would reflect that reduction.
When Does the COLA Increase Start?
The COLA increase will begin with payments issued in January 2025. The exact amount will depend on your current Social Security benefit, and the boost will help recipients keep up with inflation.
As we approach the new year, retirees can expect their Social Security payments to increase in January, providing much-needed relief from the rising cost of living.
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