Not all Americans receiving Social Security benefits will see the same increase in their payments following the 2025 Cost of Living Adjustment (COLA). With a predicted COLA increase of just about 2.5%, many recipients expecting a substantial boost may be disappointed. This modest increase will have a varying impact on different groups, especially those with lower benefits.
Let’s break down how the 2025 COLA will affect retirees, Social Security Disability Insurance (SSDI), and Supplemental Security Income (SSI) recipients.
Expected COLA Increase
The Senior Citizens League has forecasted a 2.5% increase in 2025, which is lower than many hoped for, given rising inflation and cost pressures. While any increase helps offset inflation, the smaller boost may feel underwhelming, particularly for those with lower monthly benefits.
This percentage increase applies across all Social Security, SSDI, and SSI recipients, but the exact amount of extra money depends on the individual’s current monthly check. Naturally, those receiving smaller payments will see less of a dollar boost, while those receiving higher payments will gain more.
Least Money
Three specific groups will receive the smallest COLA boost in 2025: SSI recipients, Social Security retirees with lower benefits, and SSDI recipients with smaller checks. Let’s look at each of these groups:
| Group | Average Monthly Payment (2024) | Estimated Increase (2.5% COLA) |
|---|---|---|
| SSI recipients (average) | $698 | $715 (increase of $17) |
| Retirees with low Social Security | $500 | $512.5 (increase of $12.5) |
| SSDI recipients with low benefits | $500 | $512.5 (increase of $12.5) |
SSI Recipients
SSI (Supplemental Security Income) recipients are some of the most vulnerable, and many will see only a small increase in their monthly benefits. For instance, if you qualify for the maximum SSI payment, which is $943 in 2024, you can expect a new payment of $966.50 after the 2025 COLA. This translates to an additional $23.50 per month.
However, many SSI recipients do not receive the maximum amount. The average SSI payment in 2024 is $698, and after the 2.5% increase, this will only rise by $17 to $715. For those aged 65 and older, who receive an average SSI payment of $574, the boost will be even smaller—just $14 more per month.
Social Security Checks
Retirees who receive lower Social Security payments, often due to limited work history or lower lifetime earnings, will also see minimal increases. For example, someone receiving a $500 check will only see an increase of $12.50, bringing their total to $512.50 per month. While it’s an increase, the small boost may barely cover the rising costs of daily expenses like groceries or utilities.
Low Payments
Similarly, SSDI recipients with lower benefits will face the same situation as retirees with small Social Security checks. An SSDI recipient receiving $500 a month will also see an increase of just $12.50, leading to a monthly payment of $512.50. For SSDI beneficiaries, the modest boost can feel inadequate, especially when considering that disabilities often come with additional medical and living expenses.
Smaller Boosts
The key reason these groups will receive smaller dollar increases is simple math: the lower your starting payment, the smaller your 2.5% COLA boost will be. For example, someone receiving $2,000 a month will see a $50 increase, which is a much more noticeable difference compared to the $12 to $15 increase for those with lower benefits.
COLA is based on a percentage, so even though everyone receives a 2.5% increase, the actual amount in dollars is dependent on the size of your current payment. This system tends to disadvantage those receiving lower payments, as the dollar boost may not feel significant enough to keep up with the rising costs of living.
Payment Limits
Even though some SSI recipients can qualify for up to $943 per month in 2024, not all will receive the full amount. This is because many recipients also get other benefits, such as retirement or SSDI payments, which reduce the amount of SSI they qualify for. As a result, their COLA increase will be calculated based on a smaller base payment, leading to smaller dollar increases.
SSDI payments, too, vary widely based on an individual’s work history and previous earnings. Those with shorter or lower-paying work histories will have lower SSDI benefits and, therefore, a smaller COLA boost.
The 2025 COLA increase of 2.5% may not seem like much for those receiving Social Security, SSDI, or SSI, especially for those who are already receiving lower monthly benefits. While the percentage increase is the same for all recipients, the real impact depends on the size of your current check. As a result, those with smaller benefits will feel the increase less, leaving them with only a modest extra amount each month to cover rising living costs.
For those already struggling to make ends meet, the 2025 COLA may offer little relief in the face of rising prices and inflation.
FAQs
How much will the 2025 COLA increase benefits?
The COLA is expected to increase benefits by about 2.5%.
Who will receive the smallest increase from the 2025 COLA?
SSI recipients and those with smaller Social Security or SSDI checks will see the smallest dollar increases.
What is the maximum SSI payment in 2024?
The maximum SSI payment in 2024 is $943.
How much will a $500 payment increase after the 2025 COLA?
A $500 payment will increase by $12.50, resulting in a $512.50 check.
How does COLA affect Social Security payments?
COLA adjusts benefits annually based on inflation, but the increase is proportional to your current payment.
