In 2025, over 50 million retirees will have to wait until January to receive their Social Security Cost-of-Living Adjustment (COLA) increase. On the other hand, Supplemental Security Income (SSI) recipients will benefit from the COLA boost before 2024 ends.
This difference in timing has raised questions among retirees and Social Security Disability Insurance (SSDI) recipients who are eager to know why SSI recipients receive their increase earlier. Look into the details to clarify this difference and explain the payment schedule.
Timing
The main reason retirees and SSDI recipients have to wait until January is the way Social Security schedules its payments. Payments from Social Security are only sent on business days, which prevents sending out payments on weekends or federal holidays. In this case, because January 1 is a federal holiday, the Social Security Administration (SSA) reschedules SSI payments.
SSI Payments Arrive Early
For SSI recipients, their January 2025 payment, which includes the COLA increase, will be paid on December 31, 2024. This is due to the fact that January 1 is a federal holiday, so the SSA issues the payment a day early, giving recipients access to the funds before the year ends. Even though it’s technically an early payment, it’s still considered the January benefit.
Retiree Payments in January
For retirees, however, the first Social Security payment with the 2025 COLA increase won’t come until January 3, 2025. This marks the first of four staggered payment dates for retirees, depending on their specific Social Security benefit schedule. Here’s a breakdown of when retirees will receive their payments in January:
| Payment Schedule | Date |
|---|---|
| SSI Payment | December 31, 2024 |
| 1st Social Security Payment | January 3, 2025 |
| 2nd Social Security Payment | January 8, 2025 |
| 3rd Social Security Payment | January 15, 2025 |
| 4th Social Security Payment | January 22, 2025 |
While it may seem like SSI recipients are getting a head start on the increase, the gap is only a few days. Retirees will still see their boosted benefits in the first weeks of 2025.
2025 COLA Increase
The 2025 COLA increase is projected to be about 2.5%, according to estimates from the Senior Citizens League. However, this projection has been revised downward multiple times and could potentially be even lower. The exact COLA percentage will be announced later, but even a modest increase will provide much-needed financial support to help recipients maintain their purchasing power.
For example, if a Social Security recipient receives the maximum payment of $943, a 2.5% COLA increase would raise the benefit by approximately $23 per month. This adjustment, while modest, ensures that recipients can keep pace with inflation and cover essential costs, such as groceries, utilities, and healthcare.
SSI Benefits with COLA
SSI recipients will also see an increase with the COLA adjustment. The maximum benefit in 2024 is $943 per month, and with the projected 2.5% increase, the maximum could rise to $966. For married couples who receive SSI together, the current maximum amount of $1,415 could increase to $1,450 in 2025. This extra financial support can make a difference in covering daily living expenses.
Why Does COLA Matter?
The COLA adjustments are designed to help beneficiaries keep up with the rising costs of living. Inflation eats away at the value of fixed incomes, making it harder to cover everyday expenses. COLA ensures that Social Security and SSI benefits are adjusted yearly, reflecting the economic reality and helping retirees and disabled individuals maintain their standard of living.
Although there may be a short delay for retirees and SSDI recipients, the wait for the 2025 COLA increase won’t be long. While SSI recipients receive their boosted payments a little earlier, everyone will eventually benefit from this adjustment. COLA increases play an essential role in ensuring Social Security and SSI benefits remain sufficient to cover rising costs.
FAQs
Why do SSI recipients get their COLA boost earlier?
SSI payments are sent early because January 1 is a federal holiday.
When will retirees receive the 2025 COLA increase?
Retirees will start getting the increase on January 3, 2025.
How much is the 2025 COLA increase?
The projected increase is around 2.5%, but it could be lower.
Will married couples receiving SSI see an increase?
Yes, couples could see their benefits rise to $1,450 after the COLA adjustment.
Why does Social Security adjust benefits for COLA?
COLA helps recipients maintain their buying power in the face of inflation.
