Major Changes to 2025 Social Security Benefits: What You Need to Know

The Social Security cost-of-living adjustment (COLA) is significant news for retirees, especially this year. According to The Senior Citizens League (TSCL), a non-partisan group focused on seniors, about 80% of senior households have seen their monthly expenses rise over the past year. Of those, more than 60% express concerns over how they will manage their expenses going forward.

This year’s COLA for 2025 is set at 2.5%, marking the smallest increase since 2021. This means that the average monthly benefit of $1,927 will rise to $1,976, resulting in a $49 increase.

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However, not everyone will see only a $49 increase. It is possible to estimate your personal COLA increase, even without waiting for the Social Security Administration’s personalized COLA notice in December.

Individual COLA Increases: What to Expect

Social Security COLAs are designed to combat inflation, and these adjustments are based on inflation data from the third quarter of each year. The government uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from July, August, and September to calculate this increase. For 2024, the average showed a 2.5% increase compared to the 2023 average, leading to the 2.5% COLA for next year. 

Because COLA is a percentage, each retiree will experience different dollar-value increases in 2025. For instance, if your current benefit is greater than the average of $1,927, you can expect a larger increase than $49. Conversely, if your benefit is currently less than the average, your increase will be smaller.

Calculating Your 2025 Benefit

The method to determine your 2025 benefit is straightforward. While the actual computation may be complex, a good approximation can be obtained by simply adding 2.5% to your current benefit amount.

For instance, if you receive $2,200 a month, your new benefit will be $2,255 after the 2.5% increase, which adds $55 to your payment. This calculation applies to various benefits, including retirement, spousal, and disability payments. You may find a small discrepancy, but you’ll be close to the correct figure.

Additionally, the Social Security Administration will send you a personalized COLA notice in December, detailing your exact benefit for 2025. Users with a my Social Security account can access this notice online in early December.

When to Expect Your Updated Checks

The Social Security Administration will reflect the 2025 COLA in your December 2024 benefits, but you’ll receive your first checks with the new amount in January.

The specific payment date is based on your birthdate as follows:

• Born on the 1st through the 10th: Jan. 8, 2025
• Born on the 11th through the 20th: Jan. 15, 2025
• Born on the 21st through the 31st: Jan. 22, 2025

Going forward, you will receive your benefits on the second, third, or fourth Wednesday of each month. If you have questions about your upcoming Social Security benefit, contacting the Social Security Administration is advisable. However, waiting for your COLA notice may answer many of your questions.

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