In 2025, millions of Americans receiving Social Security benefits including Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) are set to see a significant increase in their monthly payments. This adjustment, known as the Cost-of-Living Adjustment (COLA), is designed to help beneficiaries keep pace with inflation and rising living costs.
Understanding the 2025 COLA Increase
The Social Security Administration announced a 2.5 percent increase in the annual adjustment for 2025 that would be applicable to more than 72.5 million Americans. With this increase, monthly benefits to retirees will rise by nearly 50 dollars to an average of $1,976 per month. Couples receiving benefits will get an average amount of $3,089.
Average SSDI monthly benefits are expected to increase from $1,542 to $1,580. Payments for SSI beneficiaries will change on December 31, 2024, reflecting individual monthly benefits of $967 and couple payments of $1,450 per month.
Payment Schedules for 2025
The payment dates will differ based on the type of benefit and the beneficiary’s birthday:
- SSI Payments: Beneficiaries will be paid their raised payments from December 31, 2024.
- SSDI and Social Security Retirement Payments: These will start in January 2025, with particular dates depending on the birth date of the recipient:
- Born on the 1st–10th: Second Wednesday of every month
- Born on the 11th–20th: Third Wednesday
- Born on the 21st–31st: Fourth Wednesday
For those who began receiving Social Security prior to May 1997 or those receiving both Social Security and SSI, the initial COLA increase will be on January 3, 2025.
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Additional Changes for 2025
Aside from the COLA boost, there have been some other changes:
- Maximum Earnings Subject to Social Security Tax: The limit has increased from $168,600 to $176,100, so more earnings will be subject to Social Security taxes.
- Earnings Limit for Workers Under Full Retirement Age: The limit has risen from $22,320 to $23,400.
Impact on Beneficiaries
Although the 2.5% COLA boost is some relief, it is the lowest increase since 2021 and is a time of lower inflation. Some groups of advocates do not believe, however, that the CPI-W is an accurate representation of what older adults spend their money on, especially in such categories as healthcare, which has experienced steep price hikes.
For example, the AARP has complained that the formula for COLA does not accurately capture the financial stress that seniors experience.
Conclusion
The 2.5% COLA boost for 2025 brings some fiscal respite to Social Security, SSI, and SSDI beneficiaries. Nevertheless, considering the peculiar fiscal challenges that seniors and disabled individuals encounter, continued debate on modifying the COLA formula to more accurately meet their needs is necessary.
Beneficiaries are urged to look over their new benefit statements and speak with financial planners to determine how these changes impact their unique situations.
FAQs:-
What is COLA and how does it affect my benefits?
COLA (Cost-of-Living Adjustment) is an annual increase to Social Security benefits based on inflation to help maintain purchasing power.
What’s the average monthly Social Security check in 2025 expected to be?
Estimates suggest around $1,900–$2,000 monthly, depending on the final COLA rate and individual earnings history.
Can I contact SSA to verify if I’m eligible for any increase?
Yes, you can call SSA at 1-800-772-1213 or visit ssa.gov for accurate, updated benefit information.
