Social Security COLA increase: Which states will receive more money in 2025 for retirees and disability retirements?
With 2025 just around the corner, many American citizens are patiently anticipating the annual cost of living adjustment, (COLA) on their social security benefits. This adjustment has proven to be important to retirees and disabled American citizens to keep up with the rising inflation.
While the cost of living adjustment is to be applied equally across the states in America, some states will most likely be paid more. Learn about the state that will receive more money in 2025 for retirees and disabilities.
Will retirees and disabled workers in certain states earn more cost of living adjustment (COLA)?
Social security beneficiaries are entitled to an annual cost of living adjustment (COLA); this is to help them combat inflation. However, Social Security cannot calculate the official 2025 COLA until there is an update from the Labor Department on the customer price index for the month of September, which will be happening on Thursday, 10th of October, at 8:30 AM. ET.
Furthermore, a non-profit advocacy group, the Senior Citizens League, has estimated that there will be an increase in the social security benefits of 2.6% by next year. If this estimation is right, it will be the smallest increase as measured in percentage points for retired and disabled workers since 2021. Nevertheless, that small rise of about 2.6% will lead to a much greater rise as measured in dollars for retired words in some states.
Retired and disabled workers in these 10 states will receive the largest COLAs in 2025
There has been an update on the annual statistical supplement by the Social Security Administration that provides a breakdown of these benefits data across vital variables, which includes age, sex, and the geography of the beneficiary. Listed below are 10 states that earned the highest median monthly social security benefits for disabled and retired workers in December 2023.
- New Jersey: $2,100
- Connecticut: $2,084
- Delaware: $2,064
- New Hampshire: $2,039
- Maryland: $2,008
- Michigan: $2,005
- Washington: $1,992
- Minnesota: $1,982
- Indiana: $1,952
- Massachusetts: $1,946
COLA in 2025
With all indications, retired workers from the 10 states listed above will be receiving the largest Cost of Living Adjustment (COLA) come 2025 given that they are starting from the higher baseline.
This is not referring to the benefits incense based on points, but monetary in terms of dollars ($). If you are still wondering why, just note this: COLAs are calculated as a percentage of your current payments; in other words, this indicates that retired or disabled workers with a high benefit will continue to receive larger COLAs.
Why do retirees and disabled workers in certain states receive larger benefits?
One of the major reasons is because of the median income, which is higher in certain states. The five states that rank among the top ten states with median income include New Jersey, New Hampshire, Maryland, Washington, and Massachusetts. Connecticut, Delaware, and Minnesota are three states with median incomes that are above the national average.
Another reason a retired or disabled worker can receive higher social security benefits is via random chance. Some people may choose to move when they are retired; in such a case, there is no direct relationship between the benefits and the median income in their state of residence.
