Retirees have complained for decades that the purchasing power of Social Security has dwindled, despite above-average cost-of-living adjustments (COLAs) in recent years. So when news broke that Social Security benefits would be boosted by $600 in June payments, many were no doubt excited. The first June payments were made on the 12th.
Unfortunately, these reports turned out to be false. The Social Security Administration added a header to its website to clarify the situation and provide people with information about how to calculate and administer their COLAs. Here’s what you need to know about your next actual benefit increase and what it includes:
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There are still a few months to go
The Social Security Administration did not clarify where the rumor about a $600 increase in Social Security benefits came from, but several websites have already reported the story. To ease confusion, the Social Security Administration clarified that it will not issue any new COLAs until January 2025.
Governments have traditionally COLA December payments are made in January of the following year. The COLA is based on the year-over-year change in third-quarter inflation data. Specifically, it looks at the annual Consumer Price Index for Urban Wage Earners and Clerical Employees (CPI-W) for July, August, and September. The year-over-year increase in this index becomes the COLA. For example, the CPI-W increased 3.2% between Q3 2022 and Q3 2023, so that became the COLA for 2024.
With that in mind, the 2025 COLA won’t be announced until October 10, 2024. But people are already speculating about what it will look like.
How much more will seniors receive from Social Security in 2025?
The latest 2025 Social Security COLA projections from the Senior Citizens League put the increase at about 2.66 percent, which would raise the average monthly check from $1,915 in April 2024 to $1,966 per month, an increase of $51.
This is a far cry from $600 and may be disappointing for seniors who are already struggling to make ends meet on their existing income. Social Security CheckBut remember, this isn’t set in stone: If inflation doesn’t slow down as quickly as expected, the 2025 COLA could expand, giving seniors more money. We won’t know until October.
But the reality is that next year’s benefits will not be enough to cover most seniors’ living expenses, and many will need to rely on personal savings or continue working.
You may also be able to apply for additional government benefits, such as Supplemental Social Security Income (SSI), a monthly benefit administered by the Social Security Administration for people who are blind, disabled, or have low incomes. The maximum supplemental federal benefit for 2024 is $943 per month for an individual and $1,415 per month for couples.
Otherwise, keep an eye out for your 2025 COLA notice that the Social Security Administration will deliver to you in December, so you can plan your budget by telling you exactly how much you can expect next year.
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