The Social Security Administration announced today that in 2025, more than 72.5 million Americans will get 2.5% more in and Supplemental Security Income (SSI) payouts. Starting in January, Social Security retirement payments will go up by an average of $50 per month.
The COLA has gone up by an average of 2.6% per year for the past ten years. Twenty-four years ago, the COLA was 3.2%.
Starting in January 2025, a cost-of-living adjustment (COLA) of 2.5% will be given to about 68 million people who get Social Security. On December 31, 2024, payments to about 7.5 million people who get SSI will go up. Please note that some people get both Social Security and SSI.
Martin O’Malley, Commissioner of Social Security, said, “In 2025, Social Security benefits and SSI payments will go up. This will help tens of millions of people keep up with their costs, even though inflation has started to slow down.”
Other changes that happen every January are based on how much the average wage has gone up. Because of this rise, the highest amount of income that will be taxed by Social Security will rise from $168,600 to $176,100.
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Starting in early December, Social Security will send people a letter telling them their new benefit number.
This year is the first time that Social Security recipients will get a COLA letter that has been redesigned and improved.
This makes it easier for customers to find the information they need. The simplified COLA letter is now just one page long, uses simple, personalised language, and gives exact dates and dollar amounts for when a person will get their new benefit amount and any deductions.
If someone has a personal my Social Security account, they can see their COLA notice online. This is safer, easier, and faster than getting a letter in the mail. People can set up text or email alerts to let them know when a new message, like their COLA letter, is ready for them in my Social Security.
As of November 20, people will need to have their own my Social Security account in order to see their COLA letter online. To begin, go to www.ssa.gov/myaccount.
You can find out about changes to Medicare in 2025 at www.medicare.gov. Starting in late November, Social Security recipients who are also on Medicare will be able to get information about their 2025 benefit amount through my Social Security’s Message Centre.
People who have not chosen to get their texts online will get their COLA notice in the mail in December.
The Social Security Act tells us how to figure out the COLA. The annual COLA is based on the rise in the Bureau of Labour Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This is set by the Social Security Act.