The Social Security Administration (SSA) recently said that people who are eligible will get more Social Security benefits in 2025 because of the new 2.5% cost-of-living adjustment (COLA).
The Senior Citizens League says that the new change will add $48 per month to the average retirement check. The 2025 COLA will be the lowest since 2021, down from 3.2% this year.
This is mostly because the country’s inflation rate is going down. The SSA says that the average CHIP increase over the last ten years has been 2.6%.
The Consumer Price Index for Wage Earners and Clerical Workers in Urban Areas (CPI-W) was used to find the inflation rate for the third quarter. This rate is used to figure out the COLA.
3 dates that will impact Social Security benefits and retirees should know about
Starting in January 2025, almost 68 million retirees will get a 2.5% COLA. Some beneficiaries, on the other hand, will get bigger Social Security benefits sooner.
With the 2025 COLA, here are three important dates to keep in mind. In a press release on October 10, Social Security also said that starting in early December, notices about the new benefit level will be sent out by mail. It did not say what day it was.
The SSA also said that beneficiaries can look forward to a “newly designed and improved” COLA notice that will make it easier for them to find the information they need if they choose to get their notice in the mail.
The notice has been cut down to one page, uses simple, specific language, and gives exact dates, benefit amounts, and deduction amounts in pounds. You can also see your cost of living adjustment notice online if you have a My Social Security account.
You can set up email or text message alerts to go off when a new message, like a COLA notice, shows up in your My Social Security inbox.
You have to create an account before November 20, 2024, if you want to see your COLA notice online.
Go to the My Social Security website if you still need to finish setting up your account. To fully understand all of the upcoming due dates, please read more about them here:
- On January 8, 2025: on this payment date, all retirees who claimed benefits before May 1997 will get their benefits if they were born between the 1st and the 10th
- On January 15, 2025: on this payment date, all retirees who claimed benefits before May 1997 will get their benefits if they were born between the 1st and the 10th
- On January 22, 2025: on this payment date, all retirees who collected checks before May 1997 will get their payments if they were born between the 1st and the 10th
How much money will retirees receive on their new increased Social Security benefits?
Taking into account the 2.5% cost of living adjustment (COLA), here are all the payment amounts that retired workers can get in 2025:
| Retirement benefits | Social Security benefits | 2.5% COLA increase | Extra income |
| On average | $1,900 | $1,948 | $48 |
| Age 62 | $2,710 | $2,778 | $68 |
| Age 67 | $3,822 | $3,918 | $96 |
| Age 70 | $4,873 | $4,995 | $122 |
Why will some seniors potentially see their Social Security benefits reduced?
To figure out how much you will get each month from Social Security, they look at your 35 highest-earning years and your average indexed monthly earnings (AIME). In any case, if you have not paid in 35 years, this is what will happen:
- If you have 30 years of work record, the Social Security Administration will add five years of zero earnings to your 35-year record. These zeros will lower your average, which means you’ll get a smaller benefit than you would if you had a full 35 years of earnings.
- If you worked 20 years, Social Security takes into account 15 years of zero earnings, which has a more significant effect. With nearly half of your computation based on years of zero earnings, the loss in your benefit can be significant.
- If you worked more than 35 years, Social Security will still only consider your best 35 years and ignore your lowest earning years. This means that longer work histories can help you maximize your benefits by focusing only on your highest earnings.
This rule is especially important for people who have had breaks in their work history, like when they had to care for family, raise children, or work toward other goals.
If you need more Social Security, you should think about how missing years might affect your future benefits. Also, remember that some retirees depend on Social Security benefits a lot.
This could have a big effect on their ability to keep their finances stable as they get older and their retirement funds need to last longer.
