Social Security plays a vital role in the lives of millions of Americans. Each year, retirees eagerly await the announcement of the cost-of-living adjustment (COLA) to their benefits. The COLA helps ensure that Social Security payments keep pace with inflation.
The Social Security Administration has set three key dates for the 2025 COLA. On October 10, the official COLA for 2025 will be announced. This figure is based on data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
In early December 2024, the Social Security Administration will send out personalized COLA notices. These letters will detail the exact amount of each beneficiary’s benefit for 2025. Those who have a My Social Security account can access their notice online in mid-November.
The first Social Security checks reflecting the 2025 COLA will arrive in January 2025. The exact date depends on the recipient’s birthday. Those born between the 1st and the 10th will receive their check on January 8th.
Those born between the 11th and the 20th will receive theirs on January 15th.
Social Security’s key 2025 COLA dates
And those born between the 21st and the 31st will get their check on January 22nd.
While the official 2025 COLA has not been announced yet, experts predict it will be around 2.5%. This is based on current inflation trends. If this holds true, the average retired worker can expect their monthly check to increase by $48.01 to $1,968.49.
However, many retirees find that the COLA increases do not fully keep up with their expenses. Costs for items like housing and medical care often rise faster than the COLA. A recent analysis found that the purchasing power of Social Security benefits has declined by 20% since 2010.
In addition to the COLA, another change coming in 2025 is an increase in the earnings-test limit. This limit applies to Social Security beneficiaries who continue to work before reaching full retirement age. In 2024, the limit was $22,320 for those not yet at full retirement age.
It’s expected to increase for 2025 in line with inflation. These upcoming adjustments to Social Security, while modest, will impact the finances of millions of retirees. Beneficiaries should stay tuned for the official announcement on October 10 to learn the exact changes to their payments in 2025.
