If you are receiving Social Security Income (SSI) or Social Security benefits, you will receive an increase of 2.5% in your payments effective 2025. An adjustment of this nature falls under the yearly Cost of Living Adjustment (COLA) mandated for beneficiaries so that they are able to cope with inflation and the increasing costs of goods and services. This is what you need to understand concerning the impending changes.
When Will You Receive the Payment?
The SSI recipients will receive their first incremented payment earlier than the scheduled time, that is on the 31st of December 2024. This is because the 1st of January is a public holiday (being New Year’s Day) and thus the Social Security Administration has resolved to pay the beneficiaries on the last working day of December. In cases where the typical benefit payment date falls on a weekend or a federal holiday, SSA reschedules to issue the payments the previous business day.
Social Security recipients will see the implementation of the new payment amounts starting January 2025. The rise in costs, although less than it has in previous years, will still help alleviate some financial burdens.
How Much Will the Increase Be?
Due to the 2.5% cost of living adjustment (COLA), the average Social Security retirement benefits will increase by about $49 monthly. This means that beginning January 2025, the average benefit will increase from $1,927 to $1,976. Likewise survivor, and disability benefits are likely to increase accordingly. For instance, the average survivor’s pension was expected to increase from 1,788 dollars to 1,832 dollars; while Social security disability insurance 1,542 dollars was expected to rise to 1,580 dollars.
The increase is considerably lower than in prior years – for example, the 3.2% adjustment in 2024 – but is in line with the current lower inflation rates, as prices of consumer goods and services seem to have leveled.
Why Is COLA Important?
COLA was implemented so that your Social Security benefits would not be eroded by inflation. In the last few years inflation rocketed due to many reasons including the COVID-19 virus and supply chains being affected. Despite this, inflation has been on the decline as of late which is evident in the reduced cost of living adjustments for 2025. Though the increase is smaller, it still plays an important role for retirees, disabled people, and others in helping them cope with the increasing costs.
What to Expect in Early December
The SSA will inform you of the new benefit amount in December before the increase goes into effect. You should keep an eye on your post or online account so that you do not miss any such information. This notice will clearly address how the benefits will be distributed in the years to come- starting in 2025.
To summarize, the 2.5% COLA for 2025 may result in smaller dollar amounts than in past years, but it plays an important role for the economic well-being of millions of Americans nevertheless. Monitor your payment calendar and when the new amounts of benefits to be paid out are announced.
