Social Security Announces COLA Increase For 2025

Social Security beneficiaries will see a 2.5% increase to their benefit payments in 2025, according to the Social Security Administration (SSA).

The annual cost of living adjustment (COLA) will affect more than 72.5 million Social Security and Supplemental Security Income (SSI) beneficiaries. This year, Social Security beneficiaries will get a new one-page COLA summary that will detail the new benefits and the exact date the 2025 adjustment will start. The SSA mails COLA letters in December, and they are also available online in the Message Center of a beneficiary's my Social Security account.

If you are enrolled in Medicare Part B, just how much of an increase in Social Security benefit you would see might depend on the size of the Medicare Part B premium for 2025, which is projected to increase to around $185 a month, up from $174.70 this year. Typically, Medicare Part B premiums are deducted from Social Security benefits in advance.

Social Security plays an important role in retirement. In fact, the 2024 Employee Benefit Research Institute report found that three out of five retired Americans say Social Security is a major source of their retirement income. While it’s been known for months that the 2025 increase would be smaller than the 2023 and 2022 increases, the final number may impact your overall financial picture.

If that’s the case, please let me know as soon as possible. Your retirement income needs may change over time, so let’s not miss an opportunity to make any small adjustments needed to make you feel a little more comfortable as the calendar turns to 2025.

Sincerely,

Ed

^{CNBC.com, October 10, 2024}

^{ThinkAdvisor.com, October 10, 2024}