For retirees in the U.S., Social Security benefits are a vital source of income. Staying informed about adjustments and critical dates can help you better plan your finances. With 2025 just around the corner, here’s everything you need to know about the cost-of-living adjustment (COLA), essential deadlines, and tools to simplify benefit management.
COLA
The Social Security Administration (SSA) adjusts benefits annually to counter inflation. For 2025, the COLA increase is 2.5%, the smallest in four years. While modest compared to recent years, it still ensures that benefits keep pace with rising living costs.
Increase
- Average Monthly Benefit: Increases from $1,921 to approximately $1,969.
- Annual Income: Rises to $23,628 for the average retiree.
Each retiree’s actual increase depends on factors like their earnings history, work years, and the age at which they started receiving benefits.
Key Date
By November 20, 2024, retirees are encouraged to create a my Social Security account. This free online portal lets beneficiaries manage their Social Security benefits and access personalized information about the upcoming COLA increase.
Social Security Account
- View the 2025 COLA notification.
- Check updated benefit amounts starting in December.
- Request a replacement Social Security card.
- Access the 1099 form for tax purposes.
- Estimate future benefits (for those not yet retired).
- Monitor current benefits securely.
Setting up the account by November 20 ensures you’ll receive timely updates and helps you plan your 2025 budget effectively.
COLA’s Role
Social Security is a cornerstone of retirement income for most Americans. According to SSA statistics:
- Nearly 90% of people over 65 receive Social Security.
- On average, Social Security makes up 30% of retirees’ total income.
- For 12% of men and 15% of women, Social Security accounts for 90% or more of their income.
These numbers highlight how crucial COLA adjustments are for preserving retirees’ purchasing power, especially for those relying heavily on Social Security.
Planning Ahead
The 2.5% COLA increase may help retirees cover essential expenses or save for unexpected costs. While the increase is smaller than recent years (8.7% in 2023 and 3.4% in 2024), it’s a safeguard against inflation, ensuring benefits don’t lose value.
Using Key Tools
- November 20, 2024: Set up your my Social Security account to access updates.
- December 2024: View your 2025 benefit increase in the portal.
- January 2025: New benefits take effect.
By leveraging these tools and staying updated, retirees can better anticipate changes and manage their finances with confidence.
Social Security remains a critical safety net for millions, and knowing its updates ensures you can make the most of this essential resource.
FAQs
What is the 2025 COLA increase?
The COLA increase for 2025 is 2.5%.
How much will the average benefit increase?
The average monthly benefit will rise by about $48.
Why is November 20 important for retirees?
Retirees should set up a my Social Security account by this date.
How does Social Security impact retirees’ income?
It provides 30% of income for most retirees, more for some.
When will the 2025 COLA take effect?
The COLA adjustment takes effect in January 2025.
