With the year drawing to a close, millions of Americans relying on their Social Security benefits eagerly await word regarding the highly-anticipated 2025 COLA. Beneficiaries this year will get a new payment just one day before the official COLA increase is announced, continuing the tendency that these increments have been the surefire ways for retirees and the disabled to cope with these inflationary pressures.
Understanding the COLA
The COLA is the critical mechanism that, in theory, allows Social Security recipients to keep up with inflation. It is annually gauged by the SSA according to changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers-or CPI-W. In theory, this index reflects the average price changes in a basket of goods and services that Americans typically purchase, such as food, housing, and medical care.
For 2025, the estimate for COLA is in the neighborhood of 2.5%, as explained in this article, The worst news for Social Security in years. it is nonetheless a healthy jump that will affect hundreds of thousands of beneficiaries. For example, assuming this increase does take place, the average monthly benefit would increase about $48-from $1,920 to around $1,968 beginning in January 2025.
Payment schedule and timing
Beneficiaries will notice that the new Social Security payment will start to arrive as early as October 9, 2024, just one day before the COLA announcement scheduled for October 10. The payment was due on the regular month of disbursement established by the SSA. Timing depends on such factors as the type of benefit that an individual is receiving and when in the month they were born.
How recipients can expect to be paid this month is as follows:
- October 1: Recipients of SSI get their payments.
- October 3: Beneficiaries who signed up prior to May 1997 got their checks.
- October 9: Those whose birthdays occur between the 1st and the 10th of their birth month received payments.
- October 16: Beneficiaries whose birthdays are from the 11th through the 20th will receive their checks on this date.
- October 23: Individuals whose birthdays are from the 21st to the 31st will have their payments issued on October 23.
This structured calendar of payments ensures that millions of Americans remain current with financial obligations month after month.
The value of COLA adjustments
That will be an important COLA announcement, since the record 65 million Americans dependent on the benefits of Social Security are having to face extremely inflated prices for everyday necessities, especially groceries and healthcare.
The Seniors Citizens League-TSCL has underlined, as it were, the fact that numerous older Americans depend on Social Security as their major source of income. About two-thirds of seniors depend on the benefits for more than half of their total income; any increase is vital for their financial well-being.
The 2.5% projected increase is modest compared with increases in other years, but it is, nonetheless, vital for beneficiaries facing spiraling costs. Overall, the general economy has dramatically changed in the last several years, with inflation rates rather erratic since the pandemic began.
