There is some bad news about the upcoming raise in retirees’ Social Security checks. Benefits will go up more in some states than others.
The cost of living adjustment (COLA), which is estimated to be about 2.5%, will mean that retirees will get more money from the Social Security Administration (SSA).
But the official number will not be released until tomorrow, so people who will be getting checks in the future will still have to wait to find out exactly how much they will go up.
If you are already getting retirement benefits, read this to find out more about how the benefits are going up in each state.
List of states with the lowest Social Security check increase in the coming months
A lot of people know that the prices of goods and services that people need change from state to state. In terms of housing, food, and medical care, life costs may also be higher in cities than in rural areas.
As a result, bigger COLAs may be seen in high-cost areas to keep retirees’ spending power. Also, retirees whose Social Security benefits have been cut are more likely to live in places where the median income is lower.
When cost-of-living adjustments are set as a percentage of these benefits, beneficiaries may see smaller increases in their checks overall. This is because the starting amounts may be lower.
Now that we know that, let us look at which states are likely to have the fewest COLA rises next year.
The amount of money that each state gives to seniors varies, in part because the changes that sensors can pick up are based on a base that is tied to the median wage in an area. Here is a list of the 10 states where seniors are expected to get the least in COLA increases:
- Mississippi: Average benefit of $1,673; an increase of about $41.80.
- Louisiana: Average benefit about $1,700; increase about $42.50.
- New Mexico: Median benefit nearly $1,750; increase about $43.75.
- Alabama: Median benefit about $1,800; increase about $45.00.
- West Virginia: Median benefit about $1,850; increase about $46.25.
- Maine: Average benefit about $1,900; increase about $47.50.
- Montana: Average benefit about $1,950; increase about $48.75.
- California: Despite the higher cost of living, the median benefit is about $2,000; the increase is about $50.00.
- Washington, D.C.: Median benefit about $2,050; increase about $51.25.
- Alaska: Median benefit about $2,100; increase about $52.50.
It is not a surprise that the states with the lowest median wages also get the fewest benefits. That is how the system works. So, seniors in these areas may be suffering unfairly, especially if their costs are about the same as those of retirees in states with more money.
But, as we already said, Social Security payments are specific to each family. The median income for each state is shown here. The households with the top incomes in these states would definitely have much wider distributions.
Most economists use the median to figure out what the normal person would get because averages are heavily skewed toward a small group of very high-income people and do not really show the population as a whole.
So, if you are an average worker in one of these core states and expect a 2.5% raise, this will probably be pretty close to your annual gain over the next year.
Which factors could be affecting lower Social Security benefits?
It is hard to come up with cost-of-living measures that work for every home. The amount of money someone makes over their career does affect their ability to retire on Social Security alone.
For instance, a salary of $75,000 a year might be enough to cover living costs in one state but not in another. So, where someone lives when they apply for benefits and how much money they made over their lifetime are both factors.
There are many things to think about when choosing a state. It is not just people in their golden years who care about their lifestyle, though.
That is why many retirees want to find a good mix between affordability and a good standard of living. But for most of us, making a budget and making sure we can stick to it in retirement are very important things to do.
Also see:-New Check Payment For Retirees Within Hours – Social Security Direct Deposit to Your Bank Account
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