According to Marca, If you’re receiving Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), or related benefits, you might be wondering about upcoming payment changes. Good news: the Social Security Administration (SSA) has announced a 2.5% increase in benefits for 2025 due to the annual Cost of Living Adjustment (COLA). Let’s explore what this means for you.
Understanding the COLA Increase
The 2.5% COLA increase applies to all Social Security beneficiaries, including retirees, those on disability, and SSI recipients. This adjustment is designed to help beneficiaries manage rising living costs, particularly during inflationary periods. While this increase may seem modest compared to last year’s significant 8.7% rise, it still represents a welcome boost for many. On average, monthly benefits will increase by about $48, equating to approximately $600 more annually.
Shannon Benton, Executive Director of the Senior Citizens League (TSCL), highlighted the reliance many seniors have on these benefits: “Our research shows that 67% of seniors rely on Social Security for more than half their income, and 62% worry their retirement income won’t even cover essentials like groceries and medical bills.” It’s not just seniors who feel the impact; individuals on SSDI and SSI also depend on these adjustments to manage everyday expenses.
How the COLA is Calculated
The COLA is determined using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which tracks changes in the cost of goods and services that affect consumers. However, some experts, including those at TSCL, have expressed concerns that the CPI-W does not fully account for the rising costs faced by seniors and disabled individuals, particularly in healthcare. A recent survey indicated that 72% of older Americans believe Congress should prioritize changing the COLA calculation to better reflect their financial challenges.
Also read: Maximum Social Security payment possible for retirees in 2025 with COLA increase
What to Expect
If you receive SSDI or SSI, look out for a notice from the SSA by December 2024 outlining your new benefit amount, which will take effect in January. You can also check your My Social Security account for details online.
While the increase may not be substantial, it’s still a positive development for the 72.5 million Americans receiving Social Security benefits. Stay tuned for further updates and be sure to plan for the upcoming boost in your monthly payments.
