Many Social Security Disability Insurance (SSDI) recipients are eagerly anticipating the 2025 cost-of-living adjustment (COLA) increase. While the extra money won’t hit bank accounts until January 2025, projections give us an early glimpse of what to expect. Unfortunately, the increase may not be as significant as in previous years.
Projection
The Senior Citizens League, a large nonpartisan seniors’ group, projects the 2025 COLA increase to be about 2.57%. When compared to the past few years, this number is on the lower side. Here’s a quick look at the COLA rates from previous years:
| Year | COLA Increase |
|---|---|
| 2024 | 3.20% |
| 2023 | 8.70% |
| 2022 | 5.90% |
| 2021 | 1.30% |
At 2.57%, it’s clear that while 2025’s increase is not insignificant, it doesn’t come close to the 8.7% boost seen in 2023. However, it’s still above the 2021 low of 1.30%. So, while it may not be groundbreaking, it’s also not the smallest adjustment recipients have seen.
Impact
For SSDI recipients, a 2.57% increase translates to about $2.57 for every $100 in benefits. This means, for an individual currently receiving $1,000 in monthly disability benefits, their payment could increase to $1,025.70 after the adjustment. Here are some examples of what different benefit amounts might look like after the 2025 COLA:
| Current SSDI Benefit | After 2.57% COLA |
|---|---|
| $1,000 | $1,025.70 |
| $1,500 | $1,538.55 |
| $2,000 | $2,051.40 |
| $3,822 (max benefit) | $3,920.15 |
For those receiving the maximum SSDI benefit, their payments could increase by around $98. It’s worth noting that while the increase may seem small, it can still add up over time and provide some financial relief for eligible recipients.
Emergency Fund
Even though the 2025 COLA boost might not seem like much, the extra money could be used wisely. One option is to set it aside in an emergency fund. Given that the average SSDI recipient receives $1,538 per month, a 2.57% increase would bump that amount up by around $39. While that doesn’t sound huge, saving this extra amount could add up to an emergency fund of around $468 in a year.
Building an emergency fund can offer peace of mind in case of unexpected expenses, such as medical bills or car repairs. Since SSDI recipients rely on a fixed income, this added buffer can be especially valuable.
Additional Support
For those who are new to SSDI or receive smaller payments, it’s possible to qualify for Supplemental Security Income (SSI) as well. SSI provides additional financial support to those with disabilities who have low income and assets. The average SSI payment is around $695, and this amount could be a valuable supplement to SSDI, particularly if your SSDI payment is lower than average.
By combining SSI and SSDI, some individuals could have enough to cover essential living expenses more comfortably. While the COLA increase applies to both SSDI and SSI, even small increases can help stretch your income further.
What to Expect
As SSDI recipients await the official announcement of the 2025 COLA, it’s important to temper expectations. The projected 2.57% increase won’t be as significant as some past years, but it still provides some financial relief.
If you’re finding that the increase isn’t enough, consider strategies like setting aside any extra funds or seeking SSI for additional assistance. The reality is that SSDI recipients have to plan carefully, and while the COLA adjustments provide some help, they are rarely enough to offset inflation fully. Nevertheless, using that increase wisely could provide some additional cushion for the year ahead.
If you’re wondering whether this boost is high or low, it’s a bit of both. It’s higher than the low increases of the past, but it won’t come close to the more generous bumps seen in 2022 and 2023.
FAQs
When will SSDI recipients see the 2025 COLA?
SSDI recipients will see the increase in January 2025.
What is the projected 2025 COLA for SSDI?
The projected COLA for 2025 is 2.57%.
How much could an average SSDI payment increase by in 2025?
An average payment of $1,538 could increase to $1,577.
What’s the maximum SSDI benefit in 2025?
It could reach over $3,920 after the 2025 COLA.
Can SSDI recipients also receive SSI?
Yes, if their income and assets qualify, they may receive both.
