The Social Security Administration (SSA) has confirmed a 2.5% Cost-of-Living Adjustment (COLA) increase for 2025. While this is a modest boost compared to recent years, it still provides important financial support for beneficiaries, including retirees, Disability Insurance (SSDI) recipients, and Supplemental Security Income (SSI) recipients. Here’s what to expect in terms of payment dates, eligibility, and how this COLA adjustment will impact your benefits.
2025 COLA Increase
In 2025, the COLA increase will be 2.5%, which is lower than recent adjustments—0.7% less than the 2024 increase and 6.2% below 2023’s significant boost. Over the past decade, the average COLA has been around 2.6%, so this adjustment falls just slightly below that trend. Despite the decrease, beneficiaries can rely on this adjustment to help offset rising costs, especially for essential expenses.
COLA-Adjusted Payments
SSI recipients will be the first group to receive their 2.5% COLA-adjusted payment. Since January 1 is a federal holiday, their January payment will be disbursed early on December 31, 2024. This makes SSI beneficiaries the first to experience the 2025 increase.
Following the SSI disbursement, the SSA has scheduled the first COLA-adjusted payment for January 3, 2025. This payment will apply to specific groups of SSDI and retirement beneficiaries, particularly:
- Pre-May 1997 Beneficiaries: Those who started receiving Social Security benefits before May 1997.
- SSI and SSDI Recipients: Individuals receiving both SSI and SSDI or retirement benefits.
If you don’t fall into either of these categories, your payment will follow the regular monthly schedule based on your birth date.
Monthly Payment Dates
Beneficiaries not eligible for the January 3 payment will receive their 2025 payments according to the regular SSA schedule, which is based on the beneficiary’s date of birth.
Here’s a quick breakdown of the payment schedule for SSDI and retirement beneficiaries:
- January 8: For recipients born from the 1st to the 10th of the month.
- January 15: For recipients born from the 11th to the 20th.
- January 22: For recipients born from the 21st to the 31st.
SSI recipients will receive their COLA-adjusted payment early, on December 31, 2024, to accommodate the federal holiday on January 1. SSDI and retirement beneficiaries will receive their payments on the applicable Wednesday in January.
Eligibility Requirements
To qualify for Social Security retirement benefits, individuals must meet certain age and work history requirements:
- Work Credits: In 2025, workers will need 40 work credits to qualify for Social Security retirement benefits. The number of credits required for SSDI may be lower, depending on the age and work history of the applicant.
- Minimum Age Requirement: The earliest age to claim Social Security retirement benefits is 62. Individuals who claim early, however, will receive a reduced benefit amount compared to those who wait until full retirement age.
- Annual Earnings Requirement for Credits: In 2025, the earnings requirement for a work credit will increase. Each credit will require $1,810 in earnings, up from $1,730 in 2024. Workers can earn up to four credits per year, so reaching this threshold ensures that they accumulate the necessary credits to qualify for Social Security retirement benefits.
These adjustments mean workers will need to earn a bit more to achieve the same number of credits, reflecting an increase in the cost of living and wages.
COLA Increase
The COLA increase will automatically be applied to Social Security benefits in 2025, so recipients don’t need to take any additional steps. Beneficiaries should expect the increase to be included in their scheduled January payments according to their specific payout dates.
While the 2025 COLA increase is smaller than in previous years, it still provides valuable support to Social Security recipients. Whether you’re an SSI, SSDI, or retirement beneficiary, this increase is meant to help offset inflation and cover essential costs. If you’re nearing retirement or evaluating your eligibility, ensure you meet the work credit requirements and have a clear understanding of when you’ll be eligible to claim benefits.
FAQs
When will the 2025 COLA take effect?
The 2025 COLA increase takes effect with January payments.
What is the 2025 COLA percentage?
The 2025 COLA adjustment is 2.5%.
Who receives the first COLA-adjusted payment in 2025?
SSI recipients get the first adjusted payment on Dec 31, 2024.
How many credits are needed for retirement benefits?
A worker needs 40 credits to qualify for retirement benefits.
Do I need to apply for the 2025 COLA increase?
No, the COLA increase will be automatic for eligible recipients.
