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In June 2025, millions of Americans will see an increase in their Social Security benefits, with a $120 Social Security COLA (Cost-of-Living Adjustment) boost.
This change comes as part of the government’s ongoing efforts to support recipients during periods of rising inflation.
In this article, we will explore who is eligible for the increase, how it’s calculated, and the broader impact on Social Security benefits.
What is Social Security COLA?
The Cost-of-Living Adjustment (COLA) is an annual adjustment applied to Social Security benefits to help recipients maintain their purchasing power in response to inflation.
As the cost of goods and services rises, COLA ensures that Social Security benefits don’t lose value over time.
This increase applies to Social Security retirement benefits, disability benefits, and Supplemental Security Income (SSI).
How is COLA Calculated?
Cost-of-Living Adjustment is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures the average change in the prices paid by urban consumers for a basket of goods and services.
Each year, the Social Security Administration (SSA) compares the CPI-W for the third quarter (July, August, September) of the current year to the same period from the previous year. If there is an increase in inflation, Cost-of-Living Adjustment is applied accordingly.
Details of the $120 Social Security COLA Boost in June 2025
In June 2025, Social Security payments will be adjusted by $120 for eligible recipients. This boost is part of a larger strategy to protect beneficiaries from inflation, especially as prices for essential goods continue to rise.
| Benefit Type | Increase | Eligibility |
|---|---|---|
| Social Security Retirement Benefits | $120 | All recipients of Social Security retirement benefits |
| Social Security Disability Insurance (SSDI) | $120 | All SSDI recipients |
| Supplemental Security Income (SSI) | $120 | All SSI recipients |
Eligibility for the $120 COLA Boost
The $120 Cost-of-Living Adjustment increase will apply to individuals receiving Social Security Retirement Benefits, Disability Benefits (SSDI), and Supplemental Security Income (SSI). These recipients will see an increase in their monthly payments starting from June 2025.
- Retirees: Anyone currently receiving retirement benefits under Social Security will automatically qualify for the boost.
- Disability Beneficiaries (SSDI): Those receiving disability benefits will also receive the $120 adjustment.
- SSI Recipients: Those who receive SSI payments will see a similar increase, though the payment schedule may vary.
When Does the $120 COLA Payment Take Effect?
The $120 COLA increase is set to take effect in June 2025, reflecting the rise in inflation. It will be included in the monthly Social Security payments issued to beneficiaries in June.
The Social Security Administration announces the Cost-of-Living Adjustment adjustments annually, usually in October, and these changes are reflected in payments starting the following year. In this case, the June 2025 increase follows the adjustment made in January 2025.
Impact of COLA on Social Security Payments
The Cost-of-Living Adjustment increase ensures that Social Security benefits keep pace with rising costs. For instance, someone receiving $1,000 a month in Social Security benefits would see an increase of $120, bringing their total monthly benefit to $1,120 starting from June 2025.
Retirement Benefits, SSDI, and SSI recipients will benefit from this adjustment, which helps offset the impact of inflation on their cost of living.
However, it’s important to note that COLA does not guarantee additional wealth, as the increase is simply intended to maintain purchasing power.
Historical COLA Trends
In the past, COLA adjustments have fluctuated significantly based on inflation. During periods of high inflation, like the 1970s and 1980s, adjustments were substantial, sometimes exceeding 10%. More recently, Cost-of-Living Adjustment increases have generally ranged between 1% to 3%, reflecting more stable inflation rates.
- 1980: The largest Cost-of-Living Adjustment increase at 14.3%
- Recent Adjustments: Typically between 1-3% annually
Medicare Premiums and COLA
It’s essential to note that Medicare Part B premiums are often deducted from Social Security payments.
In years when Cost-of-Living Adjustment increases are small and Medicare premiums rise significantly, the net increase in Social Security payments may be minimal.
However, the “hold harmless” provision ensures that most beneficiaries won’t experience a net decrease due to premium hikes.
The $120 Social Security Cost-of-Living Adjustment boost in June 2025 will help beneficiaries maintain their purchasing power amid rising living costs.
By understanding how Cost-of-Living Adjustment works and who qualifies, recipients can better plan their finances and adjust to the changes in their monthly Social Security benefits.
FAQs
Who is eligible for the $120 COLA increase in June 2025?
All Social Security retirement and disability beneficiaries, as well as SSI recipients, are eligible for the $120 Cost-of-Living Adjustment increase.
When will the COLA adjustment take effect?
The $120 Cost-of-Living Adjustment boost will be reflected in payments starting June 2025.
How is the COLA increase calculated?
Cost-of-Living Adjustment is calculated based on the Consumer Price Index (CPI-W), which tracks inflation for urban consumers.