Social Security to announce new increase in retiree paychecks

Every year, Social Security raises overall Social Security payment amounts for retired workers, survivors, disabled people, and recipients of the Supplemental Security Income (SSI) program. This increase in paychecks usually comes from the cost of living adjustment (COLA) announced at the end of every year in October. Cola is also known as the increase in Social Security benefits aimed at combating inflation. To calculate this annual boost, inflation is analyzed using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). According to the latest projections, COLA for 2025 may increase, but at a lower rate compared to this year’s 3.2% COLA.

Which beneficiaries will be the first to benefit from the increased Social Security benefits?

Based on the Senior Citizens League (TSCL) projections, COLA for 2025 could be somewhere between 2.6% and 3%, which will give a boost to Social Security payments, but for most, perhaps this increase won’t be enough to preserve their purchasing power. Regardless of what the SSA decides, beneficiaries will receive a rise in their monthly checks on a staggered basis. As the Social Security Administration has to deliver millions of payments per month, they created a payment schedule based on special conditions such as: 

• The program beneficiaries qualify for
• The date when beneficiaries claimed Social Security benefits 
• Beneficiary’s birth date

For instance, the first beneficiaries to receive their COLA boost will be SSI recipients, as they are always paid on the first of the month. However, it is important to note that recipients from this program will get their increase in Social Security benefits this year instead of 2025, as the first of January falls on a holiday, so they will get their deposit on Tuesday, December 31st. 

Once SSI recipients receive their funds, the next group of beneficiaries to be paid will be those retired workers, survivors, and disabled people who collected benefits before May 1997. These recipients will receive their monthly checks on the third day of the month. After SSI recipients and beneficiaries from retirement, survivor, and disability insurance (RSDI) who claimed benefits before 1997, RSDI beneficiaries who claimed payments after this date will receive their payments on a staggered schedule based on their birth date, as follows:

• On the second Wednesday of the month: payment is scheduled on January, 8th for beneficiaries who were born between the 1st and the 10th 
• On the third Wednesday of the month: payment is scheduled on January, 15th for beneficiaries who were born between the 11th and the 20th 

• On the fourth Wednesday of the month: payment is scheduled on January 22nd for beneficiaries who were born between the 21st and the 31st

When will the new Social Security COLA increase be announced?

The 2025 COLA will be announced on October 10, 2024, as that is when the Bureau of Labor Statistics (BLS) will disclose the September inflation statistics, which the SSA needs to calculate the 2025 COLA. Based on the Senior Citizens League projections between 2.6% and 3%, if the 2.6% increase were to become effective, the retiree’s average payment of $1,900 per month would increase to $1,949 and the maximum Social Security payment of $4,873 would increase to $5,000. To understand more about the possible increases in Social Security benefits per program, please read the table below (don’t forget it is only an estimate as the official percentage increase will be confirmed in October):