Social Security COLA 2025: Why These Retirees Are Getting Bigger Checks

On: Sunday, April 20, 2025 6:55 AM

Social Security COLA 2025: Why These Retirees Are Getting Bigger Checks

The year 2025 has brought good news for the people of America who are taking advantage of Social Security. Their monthly pension has increased this year and there are two major reasons behind this. First, the cost of living adjustment of 2.5% and second, the implementation of the Social Security Fairness Act, which has provided relief to retired government employees by removing old rules.

If you are also a retired teacher, police officer, government employee or someone who can be affected by this scheme, then this article is for you. Everything in it has been explained in simple language.

Aspect	Details
COLA Percentage	2.5% increase to keep pace with inflation
Average Monthly Benefit Increase	~$49 boost from $1,927 to $1,976 per month
Legislative Change	Social Security Fairness Act repeals Windfall Elimination Provision (WEP) and Government Pension Offset (GPO)
Beneficiaries Affected	Over 3.2 million retirees, including teachers, firefighters, police officers, and federal employees
Retroactive Payments	$6,710 average, over $7.5 billion paid to 1.1 million beneficiaries as of March 4, 2025
Monthly Increase Effective Date	New payment amounts began in April 2025
Official Resource	Social Security Administration – COLA

What is Social Security COLA 2025?

Every year the Social Security Administration (SSA) decides how much more money pensioners should get according to inflation. In 2025, this increase has been fixed at 2.5%. Now even though this percentage may seem small, its impact is big.

For example, if a person receives an average pension of $1,961 per month, a 2.5% increase would increase their pension by about $49 per month (or $600 annually). This would make it easier for people to meet their daily needs – like food, medicine, and rent.

The increase is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). When this index rises, pensions are also increased proportionately.

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Social Security Fairness Act: A big change

The Social Security Fairness Act, which took effect in January 2025, is a historic step that eliminates two old and controversial rules:

1. Windfall Elimination Provision (WEP)

This rule cut the Social Security pension of people whose income was from jobs that did not deduct Social Security taxes (such as some state and government jobs). This drastically reduced the pensions of many retired teachers, police officers, and firefighters.

2. Government Pension Offset (GPO)

This rule affected people who received a spouse or widow/widower pension under Social Security. This pension was either reduced significantly or eliminated completely.

Now both these rules have been abolished, which has benefited millions of people.

Who will get the benefit?

According to the SSA, about 3.2 million (32 lakh) US citizens have directly benefited from this change. These include:

Retired government school teachers
Firefighters, policemen, and first responders
Federal employees who retired under CSRS (Civil Service Retirement System)
People who have a foreign pension

As of March 2025, about 1.1 million people have been given retroactive payments of $7.5 billion dollars. On average, each person has received a payment of $6,710. The new increased pension amount has started being received from April 2025.

Some new updates related to Social Security

1. New identity verification process

SSA has further strengthened ID verification to increase security. If you want to change direct deposit information or are applying for a new pension and do not have an online profile, you will have to go to the SSA office and verify your identity.

2. Direct deposit speed

Earlier it used to take up to 30 days to update direct deposit information. Now this work will be done in just 1 business day.

Important advice for retirees

1. Check your eligibility

If you previously suffered a loss under WEP or GPO, contact SSA and confirm your new benefits.

2. Create my Social Security account

This allows you to view your benefits, payment history, and retroactive payment information online.

3. Plan your tax

An increase in your pension may change your tax situation. It is better to consult a tax professional.

4. If there is a delay in payment, do not panic

SSA has advised to wait till April 2025 as all payments and information are still being processed.

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Frequently Asked Questions (FAQs)

Will I get retroactive payment?

Yes, if you were affected, chances are you would have received payment by March 2025.

How much will my monthly pension increase?

Everyone has got an increase of at least 2.5%. Those who have got relief from the Fairness Act may get more.

What to do if payment did not come even in April?

Do not contact SSA till the end of April. After that you can get information from them.

Will the spouse or survivor also get the benefit?

Yes, now after the removal of GPO, all those people whose pension was being cut earlier will be able to get full benefit.

Conclusion:

2025 has come as a ray of hope for retired Americans who did not get full pension due to earlier rules. The COLA increase and the Fairness Act have not only given them financial relief, but now they can enjoy a more secure retirement. Staying updated with all these information related to Social Security is your biggest strength.