On average, the COLA of Social Security by 2025 will be higher for retired workers in their 70s, the Department of Labor released September inflation data, and shortly afterward the Administration of Social Security made the announcement of the official cost of living adjustment (COLA) by 2025. Social Security Administration made an announcement last October about the cost of living adjustment in Social Security for next year 2025, which will be 2.5%. The annual adjustment, COLA, helps the payments of more than 72 million citizens, the vast majority of them already retired, to keep pace with price increases. As inflation has largely declined from its peak in recent years, the COLA of 2025 is lower than it has been lately.
It is 0.7% less than the 2024 COLA, which was 3.2%, and significantly less than the large 8.7% increase that beneficiaries received in 2023. “The benefits of Social Security and payments of SSI will rise in 2025, helping handfuls of people keep up with spending even as inflation has begun to cool,” said Martin O’Malley, commissioner of the Social Security, in a press release.
¿How much money will beneficiaries receive next year from the COLA increase?
Recipients will receive this increase in their Social Security benefits starting in January 2025, as the COLA adjustment for next year has finally been officially announced at 2.5%. Considering this annual increase, the beneficiaries of the programs retirement, survivor, and disability insurance (RSDI) and Supplemental Security Income (SSI) will receive the following payment amounts by program.
- Retirement benefits (plus 2.5%) On average: $1,948
- Age 62: $2,778
- Age 67: $3,918
- Age 70: $4,995
- Survival benefits (plus 2.5%) On average: $1,543
- Individual: $1,817
- 2 children: $3,744
- SSDI benefits (plus 2.5%) On average: $1,575
- Blind recipients: $2,655
- Maximum payout: $3,918
How much will Retirees receive with the COLA
Retirees aged 70 will receive the older ones COLA in nominal dollars in 2025. The average profit of the Social Security for retired workers it was $1,920 in the month of September 2024. That figure will increase by $48 the following year in case of a cost of living adjustment (COLA) of 2.5%.
However, retirees with above-average benefits will receive a COLA nominal in larger amounts, meaning your payments will increase by more than $48. Likewise, retirees with below-average benefits will receive COLA nominal in smaller dollars, meaning your payments will increase by less than $48.
Based on information provided above, retired workers who are 70 years old as of June 30, 2024, will receive the largest adjustments for cost of living the following year. This is because they already receive the greatest benefits from Social Security.
Achieving the maximum payment will be more difficult
Most of the changes that will apply to Social Security next year are positive. In addition to the cost-of-living adjustment and income-tested limits, the maximum benefit will also increase from $4,873 per month to $5,108 per month.
However, a higher maximum benefit also means that the maximum taxable income limit increases. This limit is the highest income subject to Social Security tax, and you will need to achieve it consistently to earn the maximum benefit amount possible.
