The COLA 2025 is somewhat less than it has been for the last few years, as anticipated, the Social Security Administration (SSA) declared on October 10. The COLA for 2025 will increase by 2.5%, as per Social Security Administration. Though lower than 3.2% this year, it is still consistent with the 2.6% average for the previous 20 years. As to the SSA, the average monthly benefit of almost $1,900 will see a slight boost of less than $50 starting in January.
This change is expected to offer some relief to the over 72 million retired senior citizens and disabled workers who have been facing rising costs in the past several years. For those on SSI, this extra money won’t be shared until December 31. For retirees and SSDI beneficiaries, it will be sent later. SSI beneficiaries receive their 2025 COLA rise from the Federal Government on December 31, 2025, instead of January 1, 2025, as some of you may be thinking by now.
2025 COLA SSI Increase
Starting 2025, as per COLA SSI Increase Amount 2025 a USD 288 increase to the Supplemental Security Income (SSI) program. To guarantee that those who rely on SSI can continue to satisfy their basic necessities, this adjustment is essential. It is intended to counteract the impacts of inflation and maintain the spending power of beneficiaries. Given that many of them have fixed or limited incomes, this increase is especially important for the elderly and those with disabilities.
For basic needs like food, rent, and medical bills, SSI beneficiaries frequently depend on this money. Thus, in the backdrop of continuing inflation, the $288 rise will aid in easing the financial stress of this vulnerable population. According to SSA, in order to view their COLA notice online, people who do not already have a my Social Security account must obtain one by November 20.
Who gains from the increase and what is SSI?
A federal program called SSI is meant to help low-income individuals who are 65 years of age or older, have a handicap, or are blind. SSI is determined by financial need rather than system contributions, in contrast to other Social Security payouts. The COLA’s $288 yearly payment boost to SSI beneficiaries is a welcome reprieve from the rising cost of living in areas like housing, food, and medical care.
In order to account for increases in the cost of goods and services in the economy, the Consumer Price Index for Urban Workers (CPI-W) is used to calculate the COLA. beneficiaries will notice the adjustment in their monthly checks this year due to the COLA hike, which will help them better cover their daily living costs.
COLA’s impact on Social Security payment
Although analysts predict a smaller increase for 2025, the COLA was set at 3.2% for 2024. However, evidence of slowing inflation suggest otherwise. The Social Security benefits received by around 68 million Americans today total over $1.5 trillion. October 10, 2024 is SSA has made official announcement of the 2025 COLA Increase SSI Payment Amount. That date will clarify the exact amount, but economists anticipate a little change of about 2.5%.
A rise of almost $48 on a monthly average is anticipated for beneficiaries if this estimate comes to pass, meaning that retired workers’ average check will now be $1,966. The motive of annual COLA is to prevent inflation from decreasing beneficiaries purchasing power.
Eligibility Criteria to get SSI
The Social Security Administration (SSA) has specified some requirements that must be fulfilled in order to be eligible for SSI. The primary requirements consist of:
- Low and limited earned and unearned income (such as government assistance or pensions) is a requirement for applicants.
- Eligible candidates must be above 65 or have a disability that keeps them from working regularly. Those who are blind are also qualified.
- Beneficiaries have to be citizens of the United States or legally present foreign nationals with a few further conditions.
- An individual’s total assets (including money in bank accounts, real estate, and other assets) cannot exceed $2,000 for single people and $3,000 for couples.
COLA 2025 Increase Amount Announced by SSA
- In accordance with projections, the Social Security Administration has declared a 2.5 percent increase in benefits for 2025. Annually, the SSA administers benefits that are increased by the Cost of Living Adjustment, or COLA as it is more generally known. In order to prevent gradual erosion of purchasing power, the COLA is intended to maintain Social Security retirement, survivor, and disability benefits in line with inflation. SSI beneficiaries will get increased benefits in December of this year.
- The average CPI-W for the 3rd quarter of this year and the average for the same time last year serve as the basis for the COLA calculation each year. If there is a rise, the yearly COLA is calculated by rounding the percentage to the closest tenth of one percent. According to experts, the 2.5 percent increase would result in a monthly payment increase of roughly $46.80 for a benefit user receiving $1,870 from the SSA in the upcoming year.
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Juniper Leena is a lawyer and finance graduate. She loves to write articles about the USA economy and social security. In her free time, she enjoys playing chess. She is the head of the writing team at Fort Hunt Herald and reports to Niamh Prescott. She also completed her MBA in finance in 2018.