The data is finally out, and we can reveal how much Social Security benefits will increase in 2025! Let’s dive straight into the details. The 2025 Cost of Living Adjustment (COLA) for Social Security benefits will be 2.5%. This increase becomes effective in December 2024, with the first check reflecting the new amount being paid out in January 2025.
The COLA is an annual adjustment to Social Security benefits that accounts for inflation and helps ensure that recipients maintain their purchasing power. The Social Security Administration (SSA) calculates the COLA based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). When prices rise, the COLA ensures that Social Security payments also go up, helping retirees and other beneficiaries keep up with the cost of living.
Now, let’s address some frequently asked questions about the annual COLA and what it means for you.
Applying for Social Security benefits is a big milestone in retirement planning. Understanding the process will help ensure a smooth transition to receiving the benefits you’ve earned. This guide will walk you through how to file for Social Security including the different options for filing, what documents you’ll need, and important rules that could affect your payments.
You can apply for Social Security retirement benefits starting at age 62 and up to age 70. However, it’s important to note that Social Security requires you to be 62 for a full calendar month before benefits begin, and payments are issued one month in arrears. For example, if your birthday is July 3, your eligibility would not start until August, which means your first payment would arrive in September. This rule can be surprising to many applicants, so it’s essential to plan accordingly.
There is a special rule for individuals born on the 1st or 2nd of the month, which can affect their filing eligibility differently.
The actual payment dates depend on your birthdate:
If you were born between the 1st and 10th of the month, payments arrive on the second Wednesday of each month.
If you were born between the 11th and 20th, payments come on the third Wednesday.
If your birthdate falls after the 21st, expect benefits on the fourth Wednesday.
Given the timing of payments and eligibility, it’s recommended to file your application at least four months before you want your benefits to start to avoid delays.
2. How to Apply for Social Security
There are several methods to apply for Social Security:
Online: The quickest and most convenient option is applying online at www.ssa.gov/retire.
By Phone: Call the SSA’s national toll-free number at 1-800-772-1213 (TTY 1-800-325-0778).
In-Person: You can also visit your local Social Security office. It’s advisable to call ahead to schedule an appointment to avoid long wait times.
For individuals living outside the U.S., it’s possible to contact the nearest U.S. Social Security office, U.S. Embassy, or consulate to apply.
3. Information and Documents Needed
When applying for Social Security, you’ll need to provide detailed personal, spousal, and work-related information. Below is a list of the essential information and documents required for the application:
Personal Information
Your date and place of birth and Social Security number.
If applicable, the name, Social Security number, and date of birth of your spouse or ex-spouse. You’ll also need details regarding any previous marriages, including the dates of marriage, divorce, or death.
The names of any unmarried children under 18 or children aged 18-19 who are still attending elementary or secondary school.
Your bank’s routing and account number for direct deposit.
Information on whether you’ve ever applied for Social Security, Medicare, or Supplemental Security Income (SSI) before.
Work-Related Information
Employer names and addresses for the current year and previous year.
Earnings for the past year and an estimate of your earnings for the current year.
Your Social Security Statement or record of earnings. This can be accessed online by creating an account with the SSA.
Details of any U.S. military service before 1968.
Information about any illness or injury that impacted your ability to work in the past 14 months.
Whether you or your spouse ever worked for the railroad industry.
Whether you’ve earned Social Security credits under another country’s social security system.
Whether you expect to receive any pensions or annuities from federal, state, or local government employment.
Documents You May Need
To process your application, the SSA may request the following documents:
Birth certificate (original or certified copy).
Proof of U.S. citizenship or lawful alien status (if applicable).
Military discharge papers (for military service before 1968).
W-2 forms or self-employment tax returns for the previous year.
The SSA allows you to submit photocopies of certain documents like W-2 forms, but for more important documents such as birth certificates, they will need to see originals or certified copies.
4. What to Do If You Don’t Have All the Documents
If you’re missing a required document, don’t let that delay your application. Submit what you do have, and the SSA will help you obtain missing information. In many cases, your local Social Security office can verify your birth certificate or other records online at no cost to you.
However, be mindful about mailing sensitive documents like foreign birth records or Department of Homeland Security (DHS)-issued documents. It’s recommended to bring those to a local Social Security office for in-person verification.
5. Filing for Spousal and Survivor Benefits
If you’re married, divorced, or widowed, you may be eligible for spousal or survivor benefits, which can significantly increase your Social Security income. Spousal benefits allow you to receive up to 50% of your spouse’s full retirement benefit, and these can be applied for online. Survivor benefits, on the other hand, allow you to collect up to 100% of a deceased spouse’s benefit, but due to the complexity of determining eligibility and the benefit amount, the Social Security Administration does not allow online applications for survivor benefits. You’ll need to apply in person or by phone for survivor benefits to ensure your specific circumstances are fully considered.
Timing your application for these benefits is important, as it can impact the overall amount you receive. Understanding the rules for spousal and survivor benefits is essential for maximizing your Social Security income.
6. Social Security and Medicare Enrollment
When applying for Social Security, you’ll also need to consider enrolling in Medicare. If you’re within three months of turning 65, you will need to decide whether to sign up for Medicare Part B (medical insurance). Delaying Part B enrollment could result in a late enrollment penalty, so it’s important to make an informed decision.
7. Final Thoughts: Planning for Your Social Security Benefits
Applying for Social Security is an essential step in retirement planning, and doing so at least 90 days before you want benefits to begin can help avoid delays and ensure that your income arrives on time.
Social Security should be part of a broader retirement strategy. Be sure to integrate your Social Security filing decision with other retirement income sources, such as IRAs, 401(k)s, and pension plans, to ensure a cohesive and well-rounded financial plan.
Unlike some other bills that propose a new formula to address the issue, the Social Security Fairness Act (H.R. 82) seeks to completely eliminate the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO)—without replacing them with a complicated new formula. This straightforward approach promises to address a long-standing issue that has negatively impacted the retirement income of millions of public servants. Despite strong bipartisan support, federal employees and other public sector workers have faced significant reductions in their Social Security benefits due to these provisions.
The current momentum behind the Social Security Fairness Act has advanced this legislation to a stage that no other WEP/GPO repeal effort has reached before—a floor vote. The passage of this bill would be a significant victory for public servants who have long been penalized for splitting their careers between government and private sector work.
What Are the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO)?
The WEP and GPO are two Social Security rules that reduce benefits for those who receive pensions from federal, state, or local government jobs not covered by Social Security. These rules were enacted to prevent “double-dipping” into both government pensions and full Social Security benefits, but they have long been criticized as unfair to workers who split their careers between public and private sectors.
Windfall Elimination Provision (WEP): The WEP affects the Social Security benefits of government employees who also worked in jobs that contributed to Social Security. Instead of receiving the full Social Security benefit based on their private sector work, their benefit is reduced, sometimes significantly. The provision impacts approximately 2 million former federal, state, and local government workers.
Government Pension Offset (GPO): The GPO reduces spousal and survivor Social Security benefits if the recipient is also entitled to a government pension from non-Social Security-covered employment. The reduction is two-thirds of the government pension, which can lead to a complete loss of spousal or survivor benefits. Nearly 800,000 retirees are affected by this rule.
The Social Security Fairness Act: A Legislative Push for Repeal
Introduced by Reps. Abigail Spanberger (D-Va.) and Garrett Graves (R-La.), the Social Security Fairness Act aims to fully repeal both the WEP and GPO without replacing them with a new, complicated formula, as other bills have proposed. The bill has garnered widespread bipartisan support, with 325 co-sponsors in the House and 62 co-sponsors in the Senate.
Despite this broad backing, the legislation has faced delays. As of August, Spanberger and Graves took the bold step of filing a discharge petition, a rare legislative maneuver designed to force a vote on the House floor. The petition successfully gathered the 218 signatures needed, meaning the bill will move forward for a floor vote after a mandatory seven-day waiting period. However, with other pressing legislative issues, such as the fiscal 2025 spending levels and potential government shutdowns, the earliest the vote might occur is in November.
The Importance of Repealing WEP and GPO
For more than four decades, public servants such as teachers, firefighters, police officers, and other state and local government workers have seen their Social Security benefits unfairly reduced because of these provisions. Many of these individuals contributed to Social Security while working in the private sector but found their retirement benefits diminished or eliminated due to their government employment.
Abigail Spanberger highlighted the injustice during a press conference, saying, “These Americans shouldn’t have their retirement benefits slashed, and in some cases eliminated completely, just because they chose to dedicate their careers to serving our communities.”
If passed, the Social Security Fairness Act would restore full Social Security benefits to millions of public sector retirees, providing them with the retirement income they rightfully deserve.
Next Steps and Senate Challenges
Although the House is on track for a floor vote, the bill still faces challenges in the Senate. The Senate’s companion bill has not yet seen significant movement, and while it has strong bipartisan support, advocacy groups like the National Active and Retired Federal Employees Association (NARFE) emphasize the importance of pressing senators to prioritize the bill before the end of the year.
As John Hatton, NARFE’s staff vice president of policy and programs, said, “Floor time will be at a premium in the lame-duck session. We’ll need to press senators to prioritize consideration prior to the end of the year, before the clock runs out.”
Potential Benefits for the Social Security Administration
Beyond aiding retirees, eliminating WEP and GPO could also ease the administrative burden on the Social Security Administration (SSA). Otis Johnson, national vice president of AFGE District 14, said, “It will also lift a heavy burden off the workers at the Social Security Administration, allowing the agency to better serve the public.”
The SSA has faced staffing shortages and growing backlogs, and simplifying its processes by eliminating these complex provisions would allow it to focus on improving service for beneficiaries.
A Test of Bipartisanship
The success of the Social Security Fairness Act will be a test of the bipartisan resolve of Congress. With substantial support from both sides of the aisle, the question remains: will lawmakers be willing to push this bill over the finish line and finally eliminate these long-criticized provisions?
As John Hatton remarked, “With a bill with such overwhelming bipartisan support in both the House and Senate, will it get the votes that it deserves?”
Ultimately, the Social Security Fairness Act represents a long-overdue opportunity to correct an unfair reduction in benefits that has impacted millions of public servants for decades. As the bill moves closer to a vote, advocates continue to push for action, recognizing the importance of restoring benefits not just for retirees but for the integrity of the Social Security system itself. While challenges remain, the momentum behind this bill suggests that a solution may finally be within reach.
When the news about a 3.2% cost of living increase to Social Security benefits for 2024 was announced, beneficiaries breathed a sigh of relief. But that relief was soon overshadowed by the revelation that Medicare Part B premiums would rise by 5.94% in the same year. At first glance, these numbers can paint a bleak picture. However, when you dive deeper into the figures, a different story unfolds.
In 2024, the annual increase to Social Security benefits (COLA) will be 3.2%.
This adjustment will affect Social Security retirement, disability, and SSI payments. The updated amounts will take effect in December, with recipients seeing the increase in their January payments. Note: Due to January 1 being a holiday and the normal SSI payment date being the first of the month, SSI payments for January are always disbursed at the end of the previous December.
With this update to Social Security benefits for 2024, many recipients understandably have questions about what this means for them. From how the increase was determined to how it will be applied, to who actually will see a benefit increase, it’s essential to have clarity on these changes. Let’s dive into the most frequently asked questions about this year’s COLA and provide you with the answers you need.
How is the COLA calculated?
The Social Security Administration (SSA) annually calculates the Cost of Living Adjustment (COLA) based on inflation. To understand this process, it’s important to note that the SSA uses the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers) as the primary measure for inflation, which is supplied by the Bureau of Labor Statistics. Although the Bureau releases this data every month, the SSA only uses the numbers from the third quarter, encompassing July, August, and September. The data from this quarter in the current year is then compared to the same period in the previous year. Based on this comparison, if the current year’s CPI-W is higher, there’s an increase in Social Security benefits. However, if the CPI-W remains the same or drops, then there is no Cost of Living Adjustment for that year.
How is the COLA applied to a benefit?
The way the Cost of Living Adjustment (COLA) is applied to Social Security might seem straightforward, but the actual method can give results that are slightly different from initial expectations. Instead of just increasing all the estimated benefit amounts for different ages by the announced COLA percentage, the adjustment is made to your primary insurance amount (PIA). The PIA is basically what you’d receive if you retire at the full retirement age. The adjustment starts with your PIA, and then factors in any increases if you decide to retire later or reductions if you opt for early retirement.Here’s how it works: Your PIA is first updated with the COLA. Then, depending on whether you retire early or late, reductions or increases are made. Once calculated, the amount is rounded down to the nearest dime. Lastly, any applicable deductions like Medicare Part B premiums are subtracted. This final number, once again rounded down to the nearest dollar, becomes your final benefit amount.
What age does the COLA start applying?
The Social Security publication titled “Your Retirement Benefit: How It’s Figured” succinctly addresses when the COLAs start applying to benefits. They say: “You’re eligible for cost-of-living benefit increases starting with the year you turn age 62.” That seems clear, but the COLAs are commonly reported in such a way that makes it difficult to understand. For example, in October of 2021 the SSA announced a 5.9% COLA. In most publications and new reports, this was referred to as the “2022” COLA. There are places where even the Social Security Administration seems to refer to this as the 2022 COLA. This led many to think that if they turned 62 in 2022, the cost of living would apply to their benefit. That’s not accurate. Technically, the COLA announced in October of 2021 was the 2021 COLA. It was announced in 2021, and applied to benefits in December of 2021 (payable in January of the following year).
If you look closely, there are multipleplaces where the SSA referred to this as the 2021 COLA while the rest of the world called it the 2022 COLA.
Here’s the easiest way to remember this: The first COLA which will become effective is the one announcedin the same year you turn age 62.
Do you have to be receiving benefits to get the COLA increase?
Whether you have filed for benefits or not, the Social Security COLA applies to your benefits starting with the one announced in the year you turn 62.
The Social Security Administration has a piece that is very clear on this. It says, “You’re eligible for cost-of-living benefit increases starting with the year you become age 62. This is true even if you don’t get benefits until your full retirement age or even age 70. We add cost-of-living increases to your benefit beginning with the year you reach 62.”
Now that’s very clear as to when it applies to retirement benefits, but it doesn’t mention survivor or disability. For that, we have to dig a little deeper into the Social Security website.
Because these rules are often a bit convoluted, we actually have to reference two different rules. First, we find the rule on when the COLA is applied and according to their program operations manual systems, or POMS, (that’s the handbook for processing claims), they say “Beneficiaries entitled to an AIME PIA or a Transitional Guarantee PIA are entitled to any COLA which occurs in or after the benchmark year.”
Here’s the simplified interpretation of that.
If you become entitled to benefits after 1978, you are entitled to any COLA which occurs in or after your benchmark year.
This raises the obvious question…what is a benchmark year? For that, we turn to another section of this manual which defines the benchmark year for retirement, disability, and survivor benefits.
For retirement benefits, the benchmark year is the year you turn 62.
For survivor benefits, it’s the earliest of the year you turn 62 or the year of death.
For disability benefits, it’s the earliest of the year you turn 62 or the year you become disabled.
Note: There are some changes that could happen to the benchmark year for disability benefits if you are on receiving disability and then stop for at least a 12 month period before filing for retirement benefits. For the full rules on this, read section B of the POMS manual page.
Staying informed about the annual changes to Social Security benefits is crucial for those depending on these payments. Beyond the COLA adjustment, there are also significant updates to the earnings limit, the benefits formula, and much more that can impact your monthly checks. To navigate these shifts, a reliable and concise resource is invaluable. This is where our Social Security Cheat Sheet comes in. We’ve distilled the extensive information from the official 100,000-page Social Security website into a manageable, two-page guide. By downloading this resource, you’ll have all the important insights at your fingertips. Plus, by staying subscribed to our email list, you’ll automatically receive the updated cheat sheet every year as soon as new data is released. Equip yourself with knowledge and clarity; click here to download our Social Security Cheat Sheet today.
Deciding to file for Social Security is a significant milestone, marking the transition into a new phase known as retirement. This process can seem daunting due to its complexity. However, with a clear understanding of the steps involved, which we aim to give you in this comprehensive guide on how to file for Social Security, you can navigate this journey smoothly.
Navigating the Social Security filing process as a single individual can be a daunting task. The considerations you need to make differ significantly from those of married couples. In this guide, we aim to simplify this process and provide you with the essential information you need before filing for Social Security. It’s crucial to get this right, especially as a single individual, as there’s no safety net of a spouse’s income or assets.
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