Starting in January 2025, the Cost-of-Living Adjustment (COLA) will undergo a significant change. The Social Security Administration (SSA) has announced that the index will only increase by 2.5%. This marks the smallest annual increase since 2021. Experts argue that this adjustment will result in a loss of purchasing power for retirees, as it does not take into account the rising inflation.
Beneficiaries’ checks will Increase by an average of $50 next year
As is customary, the SSA officially announces the COLA for the upcoming year during the fall. The calculation is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). To determine the COLA, the SSA reviews the average prices paid by these workers during the third quarter of the current year, specifically from July through September.
It’s important to note that inflation has declined since reaching its historic peak in June 2022. However, despite the inflation rate improving over the past two years, many seniors argue that the 2.5% COLA increase, which translates to an average $50 increase in their checks, will not be enough to cover the rising costs of medical and caregiving expenses they face daily.
These are the dates you’ll receive the COLA increase in 2025
Retirees currently receive an average monthly benefit of $1,927. With the 2.5% COLA increase applied by the government, the average pension will rise to $1,976 starting in January 2025. For married couples who both receive Social Security, the average combined benefit will increase from $3,089 to $3,014 per month.
This increase is expected to impact approximately 68 million Social Security beneficiaries. Additionally, the 7.5 million individuals who receive Supplemental Security Income (SSI) will also see their payments reflect the increase, with their first adjusted payment scheduled for December 31, 2024.
Payment dates are determined by the beneficiary’s date of birth
Beneficiaries will start receiving payments with the COLA adjustment in January 2025. The payment schedule is based on the recipient’s birthdate, as outlined below:
| Date of Birth | Payment Date |
|---|---|
| 1st to 10th | January 8 |
| 11th to 20th | January 15 |
| 21st to 31st | January 22 |
Some retirees are seeking jobs to supplement their income
This modest pension increase for 2025 has led some retirees to seek employment to supplement their income. This issue particularly affects those who receive smaller pensions and rely solely on government payments to maintain their quality of life. The inflation of recent years has eroded the earnings of many American retirees.
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