Social Security COLA 2025: New Rates, Payment Updates, and Key Distribution Dates Explained
The US Social Security Administration (SSA) has announced COLA, an acronym for Cost of Living Adjustment rates for 2025 for senior citizens availing of benefits.
The rates, which were 3.2% in 2024, have been reduced to 2.5% for 2025 in response to the cooling inflation in 2024.
For the 12 months ending in September, the inflation rate stood at 2.4%, which was 0.1% less than the corresponding period in the previous year.
Roughly 68 million Social Security recipients will start receiving adjusted payments from January 2025.
About 7.5 million beneficiaries of Supplemental Security Income (SSI) will see an increase in payments beginning December 31, 2024, as per a departmental release.
COLA Adjustment – How Will It Affect 2025 SSA Benefits?
According to SSA data, retirees in 2024 received approximately $1,927 per month. After the 2.5% COLA adjustment, this will increase to $1,976 per month in 2025, reflecting an increase of $50.
Married couples receiving Social Security benefits will see their monthly relief increase to $3,089 in 2025.
COLA Increase – Payment Schedule
The payment schedule depends on the recipient’s date of birth:
- Persons born between the 1st and 10th will receive benefits on January 8.
- Persons born between the 11th and 20th will receive benefits on January 15.
- Persons born between the 21st and 31st will receive benefits on January 22.
Some individuals benefit from both Social Security benefits and Supplemental Security Income, which is provided for low-income elderly and differently-abled American citizens.
Taxable Income Will Increase
The taxable income cap will rise from $168,600 to $176,100. While this may be irrelevant for retirees, it will affect citizens nearing retirement. The current Social Security tax rate is 12.4%, divided equally between employees and employers at 6.2% each. However, self-employed individuals must pay the full 12.4% themselves.
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