Millions of people across the United States who are enrolled in Social Security eagerly await the announcement of the Cost-of-Living Adjustment (COLA), which will be released on October 10, 2024. This adjustment, applied each year, is designed to counteract the effects of inflation and ensure that the benefits provided to retirees and individuals with disabilities maintain their purchasing power.
Once the percentage increase is announced, the adjustment will be phased in throughout 2025, although some beneficiaries may start to see the change reflected in their checks by the end of 2024. This increase is crucial for millions of Americans who rely on Social Security as a primary source of income.
The annual Social Security adjustment and its impact on benefits
The COLA is an annual adjustment made by the U.S. government to ensure that Social Security benefits are not eroded by inflation. It’s calculated based on the increase in the cost of goods and services, and its implementation guarantees that payments to beneficiaries remain sufficient to cover their basic needs.
One of the first programs to reflect this adjustment is Supplemental Security Income (SSI). Starting December 31, 2024, SSI beneficiaries will begin receiving checks with the updated amount, as the official payment day, January 1, falls on a holiday and is therefore paid out early.
Current amounts and estimated increase
Currently, individuals receiving Social Security payments get between $698 and $943 per month, depending on their financial situation and available resources. Couples who meet the established criteria can receive up to $1,415 per month, while those qualifying as essential persons (EP) are eligible for an additional $472 per month.
It is anticipated that the COLA for 2025 will be around 2.5%, according to estimates by the Senior Citizens League. If this percentage is confirmed in October, beneficiaries can expect the following increases:
- Those currently receiving $472 will see an increase to $484 in 2025, a boost of $12.
- Individuals who receive $698 per month will start receiving $715, an increase of $17.
- Beneficiaries currently receiving $943 will see their checks increase to $967, representing a $24 rise.
- Couples receiving the maximum of $1,415 per month will see an increase of $35, bringing the total to $1,450 per month.
Though these increases may not be substantial, they can make a significant difference for many families who rely on these funds to meet their daily needs.
How the adjustment impacts different beneficiary groups
The Cost-of-Living Adjustment doesn’t just affect retirees. People with disabilities who rely on Social Security also benefit from this increase. This group, which often faces additional medical expenses, needs these benefits to retain their value amid rising healthcare costs and other essential services.
For many beneficiaries, especially those receiving lower amounts, each increment offers some relief from the constant rise in living expenses, including rent and food. While the COLA may sometimes seem modest, it helps mitigate the impact of inflation on family budgets.
