Social Security announces 2025 benefit increase
“In 2025, Social Security benefits and Supplemental Security Income (SSI) will increase, helping tens of millions of people stay afloat as inflation begins to cool,” said Social Security Commissioner Martin O’Malley.
Social Security announces 2.5% benefit increase for 2025
The Social Security Administration today announced that more than 72.5 million Americans will see a 2.5% increase in Social Security benefits and Supplemental Security Income (SSI) payments through 2025. Starting in January, Social Security retirement benefits will increase by about $50 per month on average.
2025 new policy
Nearly 68 million Social Security beneficiaries will receive a 2.5% cost-of-living adjustment (COLA) starting in January 2025. Nearly 7.5 million people receiving Social Security Income (SSI) will receive an increase starting December 31, 2024. (Note: Some people receive both Social Security benefits and SSI).
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This year, for the first time, Social Security beneficiaries will receive a newly designed and improved COLA notice that makes it easier for customers to find the information they need most.
What is the Cost of Living Adjustment Act?
A 1973 law created the Cost of Living Adjustment Act, or COLA. COLAs allow Social Security and Supplemental Security Income (SSI) benefits to keep pace with inflation.
Latest Cost of Living Adjustment (COLA)
The latest cost of living adjustment (COLA) is 2.5% for Social Security benefits and SSI payments. Beginning in December 2024, Social Security benefits will increase by 2.5%, and those benefits will be paid in January 2025. Federal SSI payment levels will also increase by 2.5%, effective beginning with January 2025 payments. Because the normal SSI payment date is the first of the month, and January 1 is a holiday, January SSI payments are always paid at the end of December of the previous year.
How are cost-of-living adjustments calculated?
The Social Security Act provides a formula for determining each cost-of-living adjustment. Under that formula, cost-of-living adjustments are based on the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The CPI-W is calculated monthly by the Bureau of Labor Statistics.
The cost-of-living adjustment (COLA) in effect in December of the year is equal to the percentage increase, if any, in the CPI-W from the third quarter average of the current year to the third quarter average of the previous year. If there is an increase, it must be rounded to the nearest tenth. If there is no increase, or if the rounded increase is zero, there is no cost-of-living adjustment (COLA) for the year.
What should I do
The Social Security Administration began notifying people of their new benefit amounts by mail in early December. People with a My Social Security account can view their cost-of-living adjustment notices online, which is safer, easier, and faster than receiving them in the mail. People can set up text or email alerts when there are new messages in their My Social Security account, such as cost-of-living adjustment notices. People need to have a Social Security account open by November 20 to view their COLA notices online. To get started, visit www.ssa.gov/myaccount.