For millions of SSI beneficiaries, every dollar counts, especially when the cost of living continues to increase. If you are one of these beneficiaries, you will have realized that the prices of basic commodities such as food, housing, and other necessities are rising faster each day.
Thankfully, there is the Cost of Living Adjustment (COLA) which is meant to assist SSI recipients cope with inflation. And the good news? If you are an SSI recipient, then you will be among the first to receive the 2025 COLA increase. This increase is expected to be provided by the end of 2024.
Why COLA Matters for SSI Recipients?
The COLA is an increase in Social Security and SSI benefits paid to beneficiaries each year to help them cope with the rising cost of living. This adjustment is to ensure that the value of your benefits increases with the cost of goods and services to counter the effect of inflation.
COLA is determined by the SSA using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). It measures the changes in the cost of goods and services used by working people.
The COLA is crucial to SSI recipients because SSI benefits are generally less than Social Security retirement benefits. Even a small increment can go a long way in meeting the needs of day-to-day life. Without these adjustments, inflation would gradually erode the real value of your payments and it would become difficult to meet basic needs.
When Will SSI Recipients Receive the COLA 2025 Increase?
Of the various Social Security programs, SSI recipients will be the first to receive the COLA increase in 2025. Social Security recipients usually receive their COLA-adjusted payments in January, while SSI recipients will receive the first increased payment in December 2024. This means that SSI recipients get the first look at the 2025 adjustment before the new year has even started.
The actual date will vary depending on your specific payment frequency. But if you are an SSI recipient, then your first COLA-increased payment will be sent out by the end of December with subsequent payments continuing through 2025.
How Much Will the 2025 COLA Increase Be?
The actual percentage of the 2025 COLA hasn’t been set yet, but estimates are that it could be about 2.5%. This is still relatively high but not as high as the significant 8.7% bump in 2023. The smaller adjustment may be due to the fact that inflation rates have somewhat stabilized after rising sharply in the previous years. However, even a 2.5% increase can be useful in offering some form of comfort to people who are suffering from the rising cost of living.
For example, if your present monthly SSI benefit is $914, which is the maximum federal payment for an individual in the year 2024, a 2.5% COLA increase would increase your payment by about $22.85 to make it about $936.85 every month. Although this is not a significant difference, over the course of a year, it equals more than $270, which can go a long way in helping pay for increasing costs of living.
If you are an SSI recipient, you should get your COLA 2025 raise in December 2024. Although the exact percentage has not yet been calculated, preliminary data shows that there will be a 2.5% interest increase which may assist in cushioning the effects of inflation.
The SSI recipients will be the first to benefit from this increase, followed by those on Social Security retirement or disability benefits; thus, allowing you an early insight into how to plan your finances for the year 2025.
