The cost-of-living adjustment (COLA) is a key measure for United States citizens that directly influences Social Security benefits, allowing them to adjust for annual inflation. In 2025, this increase will be 2.5%, which translates into higher checks for millions of beneficiaries, including retirees, people with disabilities, and Supplemental Security Income (SSI) recipients.
The primary goal of the COLA is to preserve the purchasing power of people who rely on these benefits. While the increase seems modest, it can make a big difference in the daily lives of beneficiaries, especially in times of ongoing inflation and rising costs for essential goods and services.
Understanding how these changes impact individual payments is crucial for financial planning. In addition, exploring options to maximize your Social Security check can help you get the most benefit possible, even with the 2025 COLA already in place.
Social Security Changes with the 2025 COLA
The 2025 COLA will take Social Security’s maximum payments to new levels. This increase is in response to the average increase in consumer prices over the past year, ensuring that beneficiaries can maintain their quality of life. Below is a breakdown of the new maximum amounts:
- Full retirement: Up to $4,018 per month, up from $3,822 in 2024.
- Disability retirement: Up to $4,018, also exceeding the $3,822 in 2024.
- Deferred retirement: Up to $5,180, a significant increase from $4,873 in 2024.
This adjustment will be reflected in the payments beneficiaries will get starting in January 2025. However, it is important to remember that not everyone will reach the maximum amount, as this depends on factors such as work history, years contributed, and lifetime wages earned.
In addition, SSI recipients will also experience an increase, with amounts going from $943 per month for individuals to $967 per month, and from $1,415 per month for couples to $1,450 per month. These changes provide additional relief for those who rely on this support program.
How do I increase my Social Security check?
Although the COLA represents an automatic adjustment, there are steps you can take to increase your Social Security check and ensure a higher income in retirement:
- Work for at least 35 years: Social Security calculates your benefits based on your 35 highest earning years. If you worked less time, zero-earning years will be included, which will lower the average.
- Delay your retirement: For each year you postpone the start of your benefits beyond full retirement age, your check will increase by up to 8% a year, reaching the maximum possible at age 70.
- Make sure you have a high salary: Increasing your annual income can raise your average salary and, therefore, your benefit amount.
Implementing these strategies requires planning and commitment, but the results can be significant over the long term.
It is important to note that Social Security payments are only a portion of total income for many retirees in the United States. Supplementing these benefits with other programs such as SNAP or state benefits can provide additional support to meet day-to-day expenses. Knowing the COLA updates and applying the right strategies will ensure you make the most of what Social Security has to offer in 2025 and beyond.
As far as the Cost of Living Adjustment is concerned it is worth noting that it is an individual as well as across-the-board increase. It is true that we are talking about a percentage increase in benefits, but every American is affected differently. The advantage is that we can know in advance what the percentage will be for next year, so we can know an approximate figure for our Social Security benefit in 2025.