As we approach the end of the year, many Social Security beneficiaries are keenly awaiting the announcement of the 2025 cost-of-living adjustment (COLA). Current projections estimate a COLA increase of around 2.5%, which is lower than the 3.2% increase beneficiaries experienced this year. This article outlines key dates and details regarding the upcoming COLA announcement and its implications for beneficiaries.
Key Dates to Watch
October 10, 2024: COLA Announcement
The Social Security Administration (SSA) will officially announce the 2025 COLA on October 10, 2024. This date is significant as it will provide the final piece of information needed to calculate the adjustment. The SSA will average the September 2024 Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) with data from July and August. This average will then be compared to the average third-quarter data from the previous year to determine the COLA.
It’s important to note that the COLA is not directly applied to beneficiaries’ monthly checks. Instead, it is applied to the Primary Insurance Amount (PIA), which reflects the benefit one would receive if they claimed Social Security at their full retirement age (FRA). For those who claim benefits earlier or later than their FRA, the adjustment will modify their payment amount accordingly. Beneficiaries can get a rough estimate of their new benefits by applying the COLA percentage to their current monthly payments.
December 2024: Personalized COLA Notices
In early December 2024, the SSA will begin sending personalized notices to Social Security beneficiaries, detailing their specific payment amounts for 2025. Those who have established a “my Social Security” account by mid-November will have the opportunity to view their COLA notice in the Message Center of their online account. Additionally, beneficiaries can opt for email or text alerts to be notified when their notice is available.
Given the volume of notices that the SSA must distribute, it may take time for all beneficiaries to receive their letters. The agency requests that beneficiaries refrain from contacting them about missing notices until January 2025.
January 2025: First Payments Reflecting the New COLA
While the SSA will technically apply the 2025 COLA to December 2024 payments, beneficiaries will not see the new amounts reflected in their checks until January 2025. The exact payment date depends on the beneficiary’s birth date:
- Born on the 1st through the 10th: Payment on January 8, 2025
- Born on the 11th through the 20th: Payment on January 15, 2025
- Born on the 21st through the 31st: Payment on January 22, 2025
Payments will continue on the second, third, or fourth Wednesday of each month based on the beneficiary’s birth date.
Early Payments for Supplemental Security Income (SSI) Recipients
Beneficiaries receiving Supplemental Security Income (SSI) will see an increase in their payments even earlier than other Social Security beneficiaries. Typically, SSI payments are disbursed on the first of the month. However, since January 1, 2025, falls on a federal holiday, those payments will be distributed on December 31, 2024.
Planning for 2025
Once beneficiaries receive their COLA notices in December, they can better plan their budgets for the upcoming year. If there are any questions about how the COLA will affect Social Security payments, the SSA encourages beneficiaries to reach out for assistance—though it may be best to wait until the notices are received, as they will likely address many common inquiries.
In conclusion, the upcoming COLA announcement represents a critical moment for Social Security beneficiaries. Understanding the timeline and the implications of the COLA will empower individuals to effectively manage their financial planning for 2025.
