The Social Security Administration (SSA) has unveiled the 2025 Cost-of-Living Adjustment (COLA) for retirees, Supplemental Security Income (SSI), and Social Security Disability Insurance (SSDI) recipients. The new adjustment will increase benefits by 2.5%, representing a decrease from the 3.2% adjustment made in 2024.
Impact of the 2025 COLA on Benefits
For retirees, the 2025 COLA means an additional $50 per month, totaling $600 extra per year. This increase provides much-needed support for individuals relying on Social Security, particularly those with lower incomes. For instance, if a retiree’s monthly benefit is $1,920—the average amount for retirees—their new monthly benefit will be $1,968.
However, those with lower monthly payments will see a smaller increase. For example, a retiree receiving $900 per month will only experience a $22.50 increase, reflecting the adjustment’s impact on varying benefit amounts.
Timeline for the 2025 COLA Increase
The new COLA will take effect in early 2025, with payments being sent out on January 3, 8, 15, or 22. Notably, the 2025 COLA increase will not be included in the payments for October, November, or December 2024 for retirees.
For SSI recipients, the COLA boost will occur earlier, in 2024. They will receive their January payment on December 31, as January 1 is a holiday. The SSA schedules payments to avoid weekends and federal holidays, meaning SSI recipients will be the first to benefit from the 2.5% increase in 2024, while other Social Security recipients will need to wait until January 2025 to see their adjustments reflected in their payments.
The 2025 COLA increase is an essential development for Social Security beneficiaries, providing a modest boost to help recipients manage rising costs. While the increase is lower than in previous years, it still offers crucial financial support, especially for low-income retirees and those relying on SSI and SSDI. Understanding the timing and impact of these adjustments is vital for beneficiaries to plan their finances effectively in the coming year.
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