Millions of Americans are anticipating the 2025 cost-of-living adjustment (COLA) to their Social Security payments, which includes a 2.5% increase aimed at helping retirees, disability recipients, and others maintain purchasing power amidst inflation.
However, the timing of this increase varies depending on whether you receive Supplemental Security Income (SSI), retirement, or Social Security Disability Insurance (SSDI) benefits. Here’s what you need to know about when to expect the 2.5% boost to your Social Security payments.
COLA
The annual COLA increase reflects inflation and aims to help Social Security recipients retain buying power. The 2025 COLA of 2.5% is smaller than some recent adjustments but will still provide a modest increase to monthly benefits. Here’s the payment timeline based on the type of benefits you receive.
SSI Recipients
If you are on Supplemental Security Income (SSI), your benefits will reflect the 2.5% COLA increase on December 31, 2024. This is the first payment date that includes the boost, providing SSI recipients with a slightly higher payment to start 2025.
Eligibility
To receive the COLA increase on December 31, SSI recipients must meet the eligibility criteria for SSI, including:
- Low income and limited resources
- Meeting at least one of the following:
- Age 65 or older
- Have a disability
- Be blind
These requirements help ensure SSI benefits reach those with the highest need. Additionally, recipients must meet residency and other criteria to maintain eligibility.
Retirees
For those receiving Social Security retirement or Social Security Disability Insurance (SSDI), the first payments reflecting the 2.5% COLA increase will arrive in January 2025. Here’s a schedule based on your regular payment date:
- January 3: First Social Security payments of the year with the COLA increase for those who typically receive checks on the third of each month.
- January 8, 15, and 22: Monthly benefits are staggered based on recipients’ birth dates, with the increased payments issued according to standard Social Security disbursement schedules.
Amounts
The 2.5% COLA adjustment translates to an additional $2.50 for every $100 in benefits. Here’s a quick look at how different benefit amounts will increase after the adjustment:
| Monthly Benefit Before COLA | Monthly Benefit After COLA (2.5% Increase) |
|---|---|
| $500 | $512.50 |
| $1,000 | $1,025 |
| $2,000 | $2,050 |
| $3,000 | $3,075 |
| $4,000 | $4,100 |
So, a person receiving $1,000 monthly before COLA would see an increase to $1,025 after the adjustment, while someone with a monthly benefit of $4,000 will receive $4,100, gaining an additional $100 per month.
Strategies
If you haven’t yet filed for Social Security, consider maximizing your monthly benefit by delaying your claim. By waiting past your Full Retirement Age (FRA), you accumulate delayed retirement credits that increase your benefit amount each month up to age 70, and these benefits are also subject to annual COLA increases. This strategy can offer a substantial boost to your retirement income over time.
What’s Next?
The 2.5% COLA may not fully match inflation’s impact, but it does provide a little extra cushion for recipients in 2025. For those relying on Social Security as a primary income source, knowing the COLA increase and planning for other income sources, such as personal savings or part-time work, can help make the most of retirement finances.
FAQs
When will SSI recipients get the 2025 COLA?
SSI recipients will see the 2.5% COLA increase on December 31, 2024.
When will retirees see the 2025 COLA?
Retirees will receive COLA-adjusted payments starting in January 2025.
How much is the 2025 COLA increase?
The 2025 COLA is 2.5%, adding $2.50 per $100 of benefits.
Can I boost my Social Security benefit by delaying?
Yes, delaying benefits past your FRA increases your monthly amount until age 70.
Does COLA apply to delayed retirement benefits?
Yes, delayed benefits will also receive the annual COLA adjustment.
