As we enter 2025, Social Security beneficiaries should be aware of some important updates, including changes to the payment schedule and the Cost-of-Living Adjustment (COLA). These changes directly affect how much money beneficiaries will receive and when they will receive it. Here’s everything you need to know about Social Security payments and COLA updates for 2025.
What is the 2025 COLA Increase?
The Social Security Administration (SSA) has announced a 2.5% COLA for 2025. This increase helps benefits keep up with inflation, ensuring that recipients can continue to afford goods and services even as prices rise. While a 2.5% COLA is lower than some previous years (like the 3.2% increase in 2024), it reflects the current economic situation.
Impact on Average Benefits
For retirees, the 2.5% COLA will lead to an average monthly increase of about $48. As a result, the average monthly benefit will rise to around $1,969. For those receiving Supplemental Security Income (SSI), the maximum federal payment will go up to $967 for individuals and $1,450 for couples.
Social Security Payment Schedule for 2025
Social Security benefits are paid based on the beneficiary’s birth date and the type of benefits they receive. Below is the schedule for 2025 payments:
- Second Wednesday (January 8): Beneficiaries born between the 1st and 10th.
- Third Wednesday (January 15): Beneficiaries born between the 11th and 20th.
- Fourth Wednesday (January 22): Beneficiaries born between the 21st and 31st.
It’s also important to note that if a payment date falls on a federal holiday, the payment will typically be made on the previous business day.
Special Payment Dates
- SSI Recipients: SSI payments are usually made on the 1st of each month. However, if the 1st falls on a weekend or holiday, the payment will be made on the last business day of the previous month. For example, the January 2025 SSI payment will be made on December 31, 2024, because January 1 is a federal holiday.
- People Receiving Both Social Security and SSI: If a person receives both Social Security and SSI benefits, their Social Security payment will be made on the 3rd of each month, while their SSI payment will be made on the 1st.
Changes in Taxable Earnings and Work Credits
In 2025, the maximum earnings subject to Social Security tax will increase to $176,100, up from $168,600 in 2024. Also, to earn one Social Security credit, individuals will need to make $1,810. To earn the maximum of four credits in a year, you’ll need to make a total of $7,240.
Key Takeaways for Beneficiaries
- Stay Updated: Keep an eye on official Social Security communications for any changes to payment schedules or benefit amounts.
- Plan Financially: Knowing when to expect payments helps you manage your expenses throughout the month.
- Monitor Your Benefit Statements: Be sure to check your statements to ensure the COLA increase is reflected correctly.
FAQs
1. When will the 2025 COLA increase take effect?
The 2.5% COLA increase will begin in January 2025. SSI recipients will see the increase in their December 31, 2024, payment.
2. How is the COLA determined?
COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures inflation and adjusts benefits accordingly.
3. Will my payment date change in 2025?
Payment dates will not change, as they are based on your birth date. However, if the payment date falls on a holiday, the payment will be made on the previous business day.
4. What happens if a payment date falls on a holiday?
If your payment date falls on a federal holiday, you will receive your payment on the previous business day.
5. Will there be any changes in my Social Security taxes in 2025?
Yes, in 2025, the maximum amount of earnings subject to Social Security tax will increase to $176,100.
