The Social Security Administration (SSA) has announced a 2.5% cost-of-living adjustment (COLA) for 2025, affecting over 72.5 million Americans receiving Social Security and Supplemental Security Income (SSI) benefits. This adjustment aims to help beneficiaries keep pace with inflation and rising living costs.
Impact on Social Security Benefits
Starting in January 2025, Social Security retirement benefits will increase by about $50 per month on average. For instance, the average monthly benefit for retired workers is expected to rise from $1,927 to approximately $1,976.
Impact on Disability Benefits
Individuals receiving Social Security Disability Insurance (SSDI) will also see an increase in their monthly payments. The average SSDI benefit is projected to increase from $1,905 to $1,957 per month.
Supplemental Security Income (SSI) Adjustments
SSI recipients will experience an increase in their payments beginning December 31, 2024. The federal benefit rate will rise to $967 per month for individuals and $1,450 per month for couples.
Taxable Earnings Cap Increase
In addition to the COLA, the maximum amount of earnings subject to the Social Security tax will increase from $168,600 to $176,100 in 2025. This change reflects the rise in average wages and ensures that higher earners contribute appropriately to the Social Security system.
Notification and Accessing Your New Benefit Amount
The SSA will begin notifying beneficiaries about their new benefit amounts by mail starting in early December 2024. For quicker access, individuals with a personal “my Social Security” account can view their COLA notice online. To take advantage of this service, set up your account by November 20, 2024, at www.ssa.gov/myaccount.
Understanding the COLA Calculation
The annual COLA is tied to the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as determined by the Department of Labor’s Bureau of Labor Statistics. This method ensures that benefit adjustments accurately reflect changes in the cost of living.
While the 2.5% increase for 2025 is smaller than the 3.2% adjustment in 2024, it continues to provide essential support to beneficiaries in managing their expenses amid ongoing economic changes.
If you have questions about how the 2025 COLA affects your disability benefits or need assistance with Social Security matters, our law firm is here to help. Contact us to discuss your specific situation and explore how we can support you.