The Social Security Administration (SSA) updates its Cost of Living Adjustment (COLA) every year. This update, announced each October, changes the monthly payments for retirees and people with disabilities in the U.S. to keep up with inflation.
What to Expect in 2025
For 2025, the COLA increase will be smaller than the 3.2% increase in 2024.
First Payments of 2025
The SSA announces the COLA every October, which affects payments for many Americans. The new COLA for 2025 is expected to be smaller due to current economic conditions.
SSI Beneficiaries:
People who get Supplemental Security Income (SSI) will be the first to see the new COLA increase. They usually get their payments on the first day of the month. Because of the New Year’s holiday, they will receive their updated payments on December 31, 2024, for January 1, 2025.
SSDI and Retiree Payments:
After SSI recipients, people receiving Social Security Disability Insurance (SSDI) will get their updated payments on January 3, 2025. Retirees will receive their updated payments based on their birthdates:
- Birthdates from 1st-10th: January 8, 2025 (second Wednesday)
- Birthdates from 11th-20th: January 15, 2025 (third Wednesday)
- Birthdates from 21st-31st: January 22, 2025 (fourth Wednesday)
How COLA is Calculated
The COLA for 2025 will be announced on October 10, 2024, based on September’s inflation data from the Bureau of Labor Statistics (BLS). The Senior Citizens League estimates a 2.63% COLA, but this could change.
Example of COLA Impact:
If your average payment in 2023 was $697, a 2.63% COLA would raise it to $715. This means an extra $18 each month or $216 more per year for SSI recipients.
| Year | Average Monthly Payment | COLA Percentage | New Monthly Payment | Annual Increase |
|---|---|---|---|---|
| 2023 | $697 | 2.63% | $715 | $216 |
Why COLA Matters
The COLA helps Social Security benefits keep up with inflation. The SSA adjusts payments based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the BLS. If inflation goes up, beneficiaries get higher payments to cover the rising cost of living.
Economic Impact
For 2025, the COLA will reflect changes in prices for things like healthcare, housing, and basic goods. Inflation affects the COLA percentage adjustment.
Preparing for the New Year
As the COLA announcement gets closer, Social Security beneficiaries should stay updated through official SSA sources. This will help with financial planning for the new year. Make sure the SSA has your current contact information and adjust your budget to match the new payment amounts.
Understanding the COLA update is important for Social Security beneficiaries in the U.S. It ensures that payments keep up with the cost of living, providing the necessary support for retirees and disabled individuals.
What is COLA?
COLA stands for Cost of Living Adjustment. It’s an annual change in Social Security benefits to keep up with inflation.
When will the COLA for 2025 be announced?
The COLA for 2025 will be announced on October 10, 2024.
How will the 2025 COLA affect my Social Security payments?
The 2025 COLA is expected to be a smaller increase compared to 2024, potentially raising benefits by 2.63%.
When will SSI recipients receive their updated payments?
SSI recipients will see their updated payments on December 31, 2024, for January 1, 2025.
How does the SSA calculate the COLA?
The COLA is based on inflation data from the Bureau of Labor Statistics and adjusts payments according to the Consumer Price Index for Urban Wage Earners and Clerical Workers.