The Social Security Administration (SSA) has finally announced that Social Security (SS) and Supplemental Security Income (SSI) will have their payments increased by 2.5% in 2025. With this increase, SSA forecasts that about more than 72.5 million citizens benefit from it. Starting in January 2025, Social Security retirement benefits will increase by an average of $50 per month.
COLA Increase in Comparison to Last Year
Now, for the last ten years, the average increase in the cost- of-living adjustment (COLA) has been around 2.6%. The COLA was 3.2% for 2024, but the one set to be awarded for 2025 is 2.5%.
When and how will the increases be paid?
- Some 68 million beneficiaries of Social Security will see their monthly payment increase by 2.5% beginning in January 2025.
- Approximately 7.5 million SSI recipients will start receiving the increased payments from December 31, 2024.
- Some people receive both Social Security and SSI benefits, and they will also receive the adjusted amount accordingly.
Increase in Maximum Taxable Earnings
Each year, certain financial adjustments take place based on average wage growth. In 2025, the maximum taxable earnings for Social Security tax will increase from $168,600 to $176,100.
When Will Beneficiaries Be Notified?
The Social Security Administration (SSA) will begin sending notifications to beneficiaries about their new benefit amounts via mail in early December 2024.
New and Simplified COLA Notice for the First Time
Starting in 2025, Social Security beneficiaries will receive a new, simplified COLA notice, making it easier to understand their benefit updates.
- The notice will be only one page.
- It will use clear and personalized language.
- It will provide exact dates and amounts of the new benefit, along with any deductions.
How to Check COLA Information Online?
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People with a my Social Security account can view their COLA notice online, which is a faster, secure, and easier option than receiving it by mail.
- Users can set up email or text alerts to receive notifications when a new message (such as their COLA notice) is available.
- To access the COLA notice online, individuals must have a my Social Security account by November 20, 2024.
When and Where to Find Medicare-Related Updates?
- Information on Medicare changes for 2025 will be available at www.medicare.gov.
- Social Security beneficiaries enrolled in Medicare will be able to view their 2025 benefit details in the my Social Security Message Center by late November.
- Those who haven’t opted for online messages will receive their COLA notice by mail in December.
How Is COLA Calculated?
- The Social Security Act determines how COLA is calculated.
- COLA is linked to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is determined by the Bureau of Labor Statistics.
- The CPI-W data helps decide the percentage increase in Social Security payments each year.
Conclusion
In 2025, Social Security and SSI beneficiaries will receive a 2.5% increase in their payments. This adjustment is based on COLA calculations, and beneficiaries will start receiving their notifications in December 2024. To check COLA updates early, individuals can log in to their my Social Security account or create one if they haven’t already.
1. Why is Social Security increasing benefits in 2025?
The 2.5% increase is due to the annual Cost-of-Living Adjustment (COLA), which helps Social Security and Supplemental Security Income (SSI) payments keep up with inflation. COLA is determined based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
2. When will the increased Social Security payments begin?
Social Security beneficiaries will receive the increased payments starting January 2025.
SSI recipients will see the higher payments beginning December 31, 2024.
3. How much will my Social Security benefits increase?
On average, Social Security retirement benefits will increase by about $50 per month. The exact amount varies based on individual benefits and earnings history.
4. How can I check my new Social Security benefit amount?
The Social Security Administration (SSA) will mail notices with updated benefit amounts starting in early December 2024.
Beneficiaries can also check their COLA notice online via their my Social Security account for faster access.
5. Will Medicare costs also change in 2025?
Yes, Medicare costs (such as premiums and deductibles) may change in 2025. Updates on Medicare costs will be available at www.medicare.gov by late 2024. Beneficiaries can check their updated Social Security benefit amount after Medicare deductions in their my Social Security account.