It’s been another year since the Social Security Administration (SSA) became the main source of income for millions of Americans who are either retired (who have worked all their lives and are finally getting a full break) or people who need social assistance to survive in this crazy world that is becoming more and more expensive. That’s why, every year, the SSA adjusts the amounts of the payments it makes to its beneficiaries, so that they can maintain the same purchasing power in a context where inflation is ravaging the country.
That’s right, the COLA (cost of living adjustment) ensures that the money these beneficiaries receive (regardless of the program they are subject to) has that added “extra” that helps them cope better with the situation.
What is the COLA and how is it calculated?
It is a small % that is added to each payment issued by the SSA with the aim of maintaining the standard of living of those beneficiaries without noticing the rise in prices in their pockets.
This small index is calculated through the CPI-W (Consumer Price Index for Urban Wage Earners and Administrative Workers) of the third quarter of each year, comparing it with that of the current year. In this way, the administration can see the difference obtained between the prices, mainly, of the so-called “essential goods” (food, housing and health). Once this difference is calculated, the SSA adds this value as a percentage to the payments it issues to its beneficiaries.
The increase for this coming year 2025 will be a +2.5% adjustment in all payments, in accordance with the CPI-W.
Who will see the increase in their payments this 2025?
This “extra” 2.5% will be received by approximately 72.5 million SSA beneficiaries around the country, and will be automatically added in the first payment of 2025 (remember that the dates change, more information here)
What will average payments look like?
Thanks to the COLA increase, monthly payment amounts will be as follows:
- Retired workers: $1,927 to $1,976
- Retired couples: $3,014 to $3,089
- Widowed mother with two children: $3,669 to $3,761
- Elderly widow(er): $1,788 to $1,832
- Disabled worker with family: $2,757 to $2,826
- All disabled workers: $1,542 to $1,580
What about SSI?
Of course SSI (Supplemental Security Income) ecipients will also have a COLA increase on their payments, as we have mentioned before that all payments coming from the SSA will have this 2.5% adjustment by 2025. The amounts will be as follows:
- Individuals: $967
- Couples: $1450
Do I have to do anything to receive my payment?
No, you just need to adjust your finances to be able to get the most out of these payments and stay informed about possible changes that may occur or possible notifications that the SSA has for you. To do this, you can access your personal account on the SSA website and see more detailed information.
An overview of the COLA changes
| Metric | 2024 Value | 2025 Value |
| Average retirement benefit | $1,927/month | $1,976/month |
| Couple (both receiving benefits) | $3,014/month | $3,089/month |
| Widow with two children | $3,669/month | $3,761/month |
| Elderly widow(er) | $1,788/month | $1,832/month |
| Disabled worker with family | $2,757/month | $2,826/month |
| All disabled workers | $1,542/month | $1,580/month |
| Maximum SSI benefit (individual) | $841/month | $967/month |
| Maximum SSI benefit (couple) | $1,261/month | $1,450/month |
| Maximum benefit at age 70 | $4,555/month | $5,108/month |
| Taxable income limit | $168,600/year | $176,100/year |
| Earnings required per work credit | $1,730 | $1,810 |
| Minimum annual earnings for 4 credits | $6,920/year | $7,240/year |
Summary of information:
- When will beneficiaries receive the increase in their payments? It will be applied automatically starting with the first payment in January 2025.
- What types of beneficiaries receive this increase? The adjustment impacts retirees, SSI, SSDI beneficiaries, and other recipients of Social Security payments.
- How is the COLA calculated? The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter.
- Where can I confirm my new benefit amount? Through your account in my Social Security or through the notice sent by the SSA.