According to Getty Images, Social Security benefits are on the rise. The upcoming Cost of Living Adjustment (COLA) will lead to a 2.5% increase in Social Security benefits for all recipients. Although this adjustment is technically for 2024, it will take effect in December 2024 and be reflected in January 2025 payments due to the one-month arrears payment schedule.
As of the latest data available in November, the average retired worker currently receives a monthly benefit of $1,925.46. With the 2.5% increase, this amount will rise to an average of $1,973.60 in January, marking an increase of around $48. The impact of this increase will vary for different beneficiary types, such as retired workers, survivor benefits, spousal benefits, and Social Security disability (SSDI) recipients.
While these figures represent averages, the actual increase for individuals will depend on their current benefit amounts. Beneficiaries can estimate their new benefit by multiplying their current amount by 1.025 or by accessing their Social Security account at www.ssa.gov.
It’s important to consider Medicare premiums, as standard Part B premiums will increase to $185 per month in 2025. Medicare beneficiaries who receive Social Security will have these premiums deducted from their payments. Therefore, the actual increase in Social Security checks may be less than the full COLA amount once Medicare premiums are accounted for.
Overall, the upcoming COLA will provide a modest boost to most retirees, though it is the smallest percentage increase in recent years. Since Social Security COLAs are based on past inflation data, the actual impact on beneficiaries’ finances in 2025 remains to be seen.
