As we approach the end of 2024, many Social Security beneficiaries are eagerly awaiting news about the 2025 Cost-of-Living Adjustment (COLA). While the annual COLA announcement garners significant attention, there are other crucial dates that recipients should be aware of. These dates mark the progression from the announcement to the implementation of the COLA, and understanding them can help you plan for the upcoming year.
1. October 10: The 2025 COLA Announcement
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The Social Security Administration (SSA) is set to officially announce the 2025 COLA on October 10, 2024. The projected COLA for 2025 is around 2.5%, a slight decrease from the 3.2% adjustment in 2024. The final figure will be determined based on the September 2024 Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The COLA calculation involves averaging CPI-W data from July, August, and September 2024, and comparing it to the average third-quarter data from 2023. The percentage difference results in the COLA. Although it isn’t directly applied to your monthly checks, it’s added to your Primary Insurance Amount (PIA), which forms the base of your Social Security benefits. For example, if the COLA is set at 2.5% and your current benefit is $2,000, you can expect an increase of about $50 per month.
2. December 2024: Personalized COLA Notices Sent to Beneficiaries
In early December 2024, the SSA will begin distributing personalized COLA notices to beneficiaries. These notices will detail the exact increase in Social Security payments for 2025. For those who have set up a my Social Security account, the notice will be available digitally through the platform’s Message Center. Additionally, users can opt for text or email alerts when their notices are ready.
If you prefer receiving the information by mail, the SSA will send out paper notices throughout December. Given the sheer number of recipients, it may take a while for all notices to be distributed, and the SSA requests beneficiaries to wait until January 2025 before reaching out about any missing notifications.
3. January 2025: First Payments With COLA Increase
Although the COLA will technically be applied to December 2024 payments, the first check reflecting the new COLA adjustment will arrive in January 2025. The exact payment date will depend on the beneficiary’s birthdate:
- Born between the 1st and 10th of a month: January 8, 2025
- Born between the 11th and 20th: January 15, 2025
- Born between the 21st and 31st: January 22, 2025
For Supplemental Security Income (SSI) beneficiaries, the COLA adjustment will be reflected in the payment on December 31, 2024, due to the federal holiday on January 1, 2025. SSI payments are typically made on the first of each month, but this schedule adjustment ensures that recipients receive their payment on time.
How to Prepare for the 2025 COLA
Once you know your new Social Security payment amount for 2025, it’s essential to adjust your budget accordingly. Keep an eye out for the official notice from the SSA in December and plan your expenses based on the increase.
If you have additional questions about the COLA or how it will affect your benefits, the SSA encourages beneficiaries to wait until their official notice arrives. This can save time and effort, as the notice will provide most of the information needed.
Read More:Upcoming Changes to Social Security Payments: What Retirees Need to Know for 2025
Maximize Your Social Security Benefits
Beyond the annual COLA, there are other strategies that can help you increase your Social Security benefits over time. Many retirees miss out on potential income boosts due to lack of awareness. Exploring available Social Security strategies can help you make the most of your retirement benefits.
Being aware of these critical dates and understanding the COLA process can help Social Security recipients plan for 2025. Stay informed and proactive to ensure you are prepared for any changes that may affect your benefits
Ref Article: Fool.com
