Understanding the dynamics of Social Security payments is crucial for millions of retirees and individuals with disabilities in the United States. In 2024, while the checks issued by the Social Security Administration (SSA) for age retirement and disability benefits cannot increase during the year, there are specific details that might affect the amount you receive. This article will delve into how the Cost of Living Adjustment (COLA) works and what to expect in 2025.
It’s essential to realize that the check you receive in January 2024 as a Social Security beneficiary will be the same throughout the year. This is because mid-year increases in the COLA are not possible. However, the fact that payments in August 2024 are higher than those in August 2023 reflects a 3.2% increase in retirement checks compared to the previous year.
Key Details About Social Security Payments in 2024
- Annual 3.2% Increase: The 2024 increase over 2023 means beneficiaries will receive slightly higher payments compared to previous years. This adjustment is due to the COLA, which is calculated annually based on the previous year’s third-quarter inflation.
- COLA Calculation: The COLA is determined by the inflation observed in July, August, and September. These months are crucial for setting the Social Security benefit increase for the upcoming year. Until then, there will be no changes to retirement payments.
- Other Benefits: While Social Security payments do not increase mid-year, other benefits, such as Supplemental Security Income (SSI), might experience increases. These adjustments are individual and not applied across the board.
When Will the 2025 COLA Take Effect?
The COLA for 2025 will be reflected in Social Security checks starting in January of that year. This happens every year, and while the payment may occasionally arrive a few days early due to calendar irregularities, it will still belong to the 2025 payment schedule.
- First Payment with 2025 COLA: The first payment to include the 2025 COLA will be the January Supplemental Security Income, which will be deposited into beneficiaries’ accounts on December 29, 2024. It’s important to note that this early payment is an exception and is part of the following year’s schedule.
Therefore, we should not expect a new Cost of Living Adjustment until the 2025 payment schedule begins. Any increases in 2024 benefits reference the checks from the previous year. We will have to wait until October to find out what the final COLA for 2025 will be.