As 2024 draws to a close, retirees who began receiving Social Security benefits before May 1997 should be aware of their remaining payment schedule and the forthcoming Cost-of-Living Adjustment (COLA) for 2025. Understanding these details is crucial for effective financial planning.
Payment Schedule for November and December 2024
For beneficiaries who started receiving Social Security benefits before May 1997, payments are typically disbursed on the third day of each month.
If the third falls on a weekend or federal holiday, payments are made on the preceding business day. Here’s the schedule for the remaining months of 2024:
| Month | Payment Date |
|---|---|
| November | November 1 |
| December | December 3 |
Understanding the 2025 COLA Increase
The Social Security Administration (SSA) has announced a 2.5% COLA for 2025. This adjustment aims to help beneficiaries keep pace with inflation.
For example, if a retiree currently receives $1,500 per month, a 2.5% increase would add $37.50, bringing the new monthly benefit to $1,537.50.
Impact on Monthly Benefits
The COLA increase will be reflected in the January 2025 payment. Beneficiaries can expect their adjusted benefits to be deposited on January 3, 2025.
It’s important to note that while the COLA provides additional income, rising costs in areas like healthcare and housing may offset these gains.
Preparing for the COLA Adjustment
To ensure a smooth transition with the COLA increase:
- Verify Personal Information: Ensure that your contact and banking details are up to date with the SSA to avoid payment delays.
- Review Benefit Statements: Access your “My Social Security” account to view your updated benefit amount and understand how the COLA affects your payments.
- Plan for Budget Adjustments: Anticipate changes in your monthly income and adjust your budget accordingly to accommodate the new benefit amount.
Key Dates to Remember
- December 3, 2024: Final 2024 payment for pre-1997 retirees.
- January 3, 2025: First payment reflecting the 2.5% COLA increase.
FAQs
When will the 2025 COLA be applied to my benefits?
The 2.5% COLA will be applied to your January 2025 payment, which will be disbursed on January 3, 2025.
How is the COLA determined?
The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), measuring inflation and adjusting benefits accordingly.
Do I need to apply for the COLA increase?
No, the COLA is automatically applied to all eligible Social Security beneficiaries.
Will the COLA affect my tax obligations?
An increase in benefits may affect your taxable income. It’s advisable to consult with a tax professional to understand any potential implications.
How can I verify my new benefit amount?
You can access your “My Social Security” account online to view your updated benefit statement reflecting the COLA adjustment.