The cost of living adjustment (COLA) is an annual increase reflected in Social Security beneficiaries’ checks, designed to prevent them from losing purchasing power to inflation. This adjustment is calculated using the Consumer Price Index for Urban Wage Workers and Administrative Workers (CPI-W).
This year, projections indicate a COLA around 2.5%, a decrease from 3.2% last year, although there could be changes depending on the final economic figures. Here are three key dates related to the 2025 adjustment that you should know to be prepared.
1. October 10, 2024: COLA official announcement
On October 10, 2024, the Social Security Administration will officially announce the cost of living adjustment percentage for the year 2025. This calculation is made taking into account the CPI-W figures for July, August, and September 2024, comparing them with data from the third quarter of 2023. The resulting difference will determine the increase in payments.
Although the COLA does not apply immediately to checks, it does impact the Primary Insurance Amount (PIA), which is the amount a beneficiary is entitled to if they claim their benefits at full retirement age. Depending on the age you decide to receive Social Security, this amount will be adjusted up or down to reflect the corresponding increase in 2025.
2. December 2, 2024: Custom COLA Notices
Starting December 2, 2024, the Social Security Administration will send personalized notices to beneficiaries, informing them of the new amount of payments with the COLA applied for 2025. These notices will first be available on the “my Social Security” platform. If you have an account in this system before mid-November, you will be able to access your notice in the Message Center electronically and receive alerts by email or text message when it is ready.
Additionally, paper notices will be sent by mail, although this may take time due to the large number of beneficiaries. The Social Security Administration recommends not contacting them about missing notices until January 2025, if you have not received the notification by December.
3. January 2025: First payments with COLA
The first payments reflecting the adjusted COLA will be sent in January 2025, but the exact date will depend on your date of birth:
- January 8, 2025: If you were born between the 1st and 10th of any month.
- January 15, 2025: If you were born between the 11th and the 20th.
- January 22, 2025: If you were born between the 21st and the 31st.
Social Security payments are sent on the second, third, or fourth Wednesday of the month, depending on your date of birth. However, if you receive Supplemental Security Income (SSI), you will see the increase a little sooner. Since January 1 is a federal holiday, SSI checks for January 2025 will be sent on December 31, 2024.
What to do after receiving your COLA notice?
Once you’ve received notification of your new Social Security or SSI amount for 2025, it’s a good time to start planning your budget for next year. If you have questions about how the COLA will affect your payments, you can contact the Social Security Administration. However, it is advisable to wait to receive your notice in December, as it will contain answers to most of your questions.