The Cost of Living Adjustment (COLA) increase is a vital issue for Social Security beneficiaries, as it defines the increase in their monthly payments. For 2025, the Social Security Administration has set a 2.5% increase, which represents the lowest annual adjustment since 2021.
Despite the slowdown in inflation, some U.S. retiree advocates believe this increase is insufficient, as beneficiaries could face difficulty maintaining their purchasing power in the face of rising costs.
Key details about the 2025 tail payments
2.5% increase in payments: The 2025 Tail will provide an average increase of $50 in monthly payments for Social Security beneficiaries.
Adjusted monthly payments:
- Individuals receiving $472 per month will see a $12 increase, reaching a total of $484.
- Beneficiaries receiving $698 will get a $17 increase to $715 per month.
- Those receiving $943 will see their payment increase by $24, for an adjusted total of $967.
- Couples receiving $1,415 will receive $35 more, for a new total of $1,450.
- Impact on purchasing power: This adjustment is designed to mitigate the effects of inflation and help retirees maintain their financial stability.
When will the first payments of the 2025 tail be received?
The first payments with the new cola adjustment will be sent on December 31, 2024, due to January 1 being a holiday. Supplemental Security Income (SSI) recipients will be the first to receive the increase.
This increase, while modest, will be a relief for many retirees who rely on their Social Security payments to cover their day-to-day expenses.