Recent news says that the Social Security Administration announced on Thursday that American retirees will get a 2.5% raise in their Social Security checks in 2025.
This means that starting in January, these checks will be worth an average of $50 more each month.
People who get benefits should know that the cost of living adjustment, or COLA, is an annual raise based on the inflation rate and set by the Bureau of Labor Statistics.
For example, the COLA for 2024 was set at 3.2%, which meant that prices were going up at that time. The rate is found by adding up the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) figures for the third quarter.
Social Security has announced a new increase in retirees’ checks
People who are retired have not seen an increase this small since 2020, when they saw a 1.3% rise. After that, the rate went through the roof because of the COVID-19 epidemic.
This year, the rate of price increases has slowed down to more normal, though still important, levels. The Federal Reserve wants the inflation rate to be 2%. Supplemental Security Income is a program for people over 65 and disabled people.
The same 2.5% raise will be made for people who receive these benefits. It was said by the Social Security Administration that more than 72.5 million people will gain from the increase.
The government also said that the highest wage that will be taxed by Social Security will go up from $168,600 to $176,100 on January 1.
With this official 2.5% COLA raise, people who get SSI will get an extra $17 a month on average. Individuals and couples will get an extra $24 and $35 a month, respectively.
Starting in January 2025, this annual raise will be given to more than just people who get Supplemental Security Income (SSI). It will also go to retirees, survivors, and disabled people. You can see all of the future payments for each program below:
Retirement benefits | Social Security checks | 2.5% COLA increase | Extra income |
On average | $1,900 | $1,948 | $48 |
Age 62 | $2,710 | $2,778 | $68 |
Age 67 | $3,822 | $3,918 | $96 |
Age 70 | $4,873 | $4,995 | $122 |
Disability benefits | Social Security checks | 2.5% COLA increase | Extra income |
On average | $1,537 | $1,575 | $38 |
Blind recipients | $2,590 | $2,655 | $65 |
Maximum payment | $3,822 | $3,918 | $96 |
SSI benefits | Social Security checks | 2.5% COLA increase | Extra income |
On average | $698 | $715 | $17 |
Individuals | $943 | $967 | $24 |
Couples | $1,415 | $1,450 | $35 |
Essential person | $472 | $484 | $12 |
Due to the cost of living adjustment (COLA), some people will get bigger raises, like retirees, as you can see from the information above.
The new 2.5% will give an extra $122 to retired workers who put off getting benefits until they turned 70 and paid into Social Security based on their highest taxed income.
Keep in mind that this bigger raise will only be available to people who get the most money each month, which is $4,873.
So, if you want to apply for this benefit, you should talk to a financial advisor or Social Security expert about your situation. This will help you improve your chances of being approved.
How has the cost of living adjustment increased for retirees in the last few years?
It is possible that the cost of living adjustment (COLA) is one of the most important issues for the more than 64 million retirees in the United States. These are the changes in the COLA over the last ten years, based on data from the Social Security Administration:
Year | COLA increase for retirees in the last 10 years |
2015 | 1.70% |
2016 | 0% |
2017 | 0.30% |
2018 | 2% |
2019 | 2.80% |
2020 | 1.60% |
2021 | 1.30% |
2022 | 5.90% |
2023 | 8.70% |
2024 | 3.20% |
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