Social Security benefits are set to increase for all recipients in January 2025, thanks to the cost-of-living adjustment (COLA). This adjustment, which has been a long-standing element of Social Security benefits since 1975, is designed to keep payments in line with inflation to ensure that the purchasing power of recipients is not eroded over time.
The estimated average retirement benefit will increase by $49 a month, from $1,927 to $1,976, according to the Social Security Administration (SSA). The maximum amount available to retirees who stop working at the Full Retirement Age of 67 is $4,018, while those who retire at age 70 could receive as much as $5,108 per month. However, most retirees do not receive the maximum benefit available, as it is dependent on their earnings during their working years.
All SSA-administered benefit and welfare programs, including retirement benefits, survivor benefits, Supplemental Security Income (SSI), and Social Security Disability Insurance (SSDI), are subject to the annual COLA. The first increased checks for retirement benefits will begin in December, with SSI beneficiaries seeing their increased amounts paid on December 31.
For everyone else, the boosted benefits will start in January. Those who have been receiving Social Security since prior to May 1997 or who also collect SSI payments will receive their money on Friday, January 3, with retirement payments being issued on Wednesdays throughout the month.
Independent Social Security and Medicare policy analyst Mary Johnson noted that the 2025 COLA will be the lowest received by Social Security beneficiaries since 2021, despite persisting inflation on essential items. AARP CEO Jo Ann Jenkins emphasized the importance of the adjustment for older Americans, many of whom rely on Social Security as a key source of income.
Looking ahead, there will be no further increases to Social Security benefits for the rest of the year, as the COLA applies from January through December. The SSA will announce another potential boost in October 2025, which will be applicable to benefits paid in 2026.
In conclusion, the upcoming increase in Social Security benefits in January 2025 is a welcome relief for recipients, especially in light of rising inflation. While the adjustment may not fully offset the impact of increased costs, it provides much-needed support for retirees and other beneficiaries who rely on these payments for their financial well-being.
