The Social Security Administration (SSA) revealed on Thursday that upwards of 72.5 million Americans will benefit from a 2.5% rise in their payment benefits in 2025. This cost-of-living adjustment (COLA) marks the smallest annual increase since 2021, when beneficiaries observed a 1.3% uptick in their benefits. The 2025 COLA is significantly lower than in previous years, a consequence of unprecedented inflation rates.
In 2024, beneficiaries experienced a 3.2% increase, while 2023 saw an 8.7% rise and 2022 had a 5.9% increment. As inflation has stabilized, COLA adjustments are reverting to more conventional figures. The Senior Citizens League, a nonpartisan organization focused on senior issues, reports that Social Security’s yearly benefit hikes have averaged approximately 2.6% over the last two decades.
The precise increase percentage for the 2025 COLA will be ascertained from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) data for the months of July, August, and September in 2024. The SSA is set to officially declare the 2025 COLA on October 10, 2024. In December 2024, the SSA will dispatch personalized notifications detailing each beneficiary’s revised benefit amounts for the year 2025.
Announcement of 2025 COLA increases
Beneficiaries can find this information in their online Message Center, provided they possess a Social Security account. Mailed notices will be sent out in December.
Even though the COLA will officially affect payments released in December 2024, checks reflecting the adjustment will commence in January 2025. The specific payment date will depend on the beneficiary’s birthdate. Although the anticipated 2.5% increase may reduce some financial burdens, it may not sufficiently counterbalance the overall rise in expenses.
Beneficiaries are encouraged to check their individual notices for the most precise information regarding their adjusted benefits. It is crucial to keep in mind that an increase in Medicare premiums could diminish the net gain in Social Security benefits. Recipients of SSI will receive their revised payments on December 31, 2024.
