Social Security recipients get an annual cost-of-living adjustment (COLA) to keep their benefits’ buying power up to date with rising prices. The Social Security Administration can’t figure out the official 2025 COLA until the Labor Department releases the September Consumer Price Index data. This will happen by Thursday, Oct. 10, at 8:30 a.m. ET. Even so, The Senior Citizens League, a non-profit lobbying group, says that benefits will go up by 2.6% next year. Retirement income would go up the least (in percentage points) since 2021 if this prediction comes true. That being said, in some places, retirees would get a bigger raise (in dollars) because of this supposed 2.6% COLA.
Higher Social Security check increases for 2025 are soon to be released
A retired worker’s Social Security benefit is based on how much they earned over their lifetime and their qualifying age. The formula used to figure out their main insurance amount (PIA) is based on their 35 highest-paid years of work, adjusted for inflation. This is what they will get if they collect Social Security when they reach full retirement age. Next, the PIA is changed to include the dates of retiring. If a worker claims Social Security payments before they reach full retirement age, they will be cut, so they will get less than 100% of their PIA. Workers will get a bigger benefit—that is, more than 100% of PIA—if Social Security is delayed until full retirement age.
Every year, the Social Security Administration puts out a statistical supplement that gives an anonymous breakdown of payment data by age, gender, and location, among other things. The list below is from the data supplement for 2024. It lists the 10 states where retired workers got the most money each month from Social Security as of December 2023. But keep in mind that the formula doesn’t directly look at the place where the person lives. But the fact that the median income varies from state to state means that location has an indirect effect.
The Social Security Administration puts out a statistical supplement every year that gives an anonymous breakdown of benefit numbers by gender, age, and area. This list comes from the Statistical Supplement for 2024. As of December 2023, it shows the ten states where retired workers got the most money each month from Social Security.
- New Jersey: $2,100
- Connecticut: $2,084
- Delaware: $2,064
- New Hampshire: $2,039
- Maryland: $2,008
- Michigan: $2,005
- Washington: $1,992
- Minnesota: $1,982
- Indiana: $1,952
- Massachusetts: $1,946
In 2025, seniors in these ten states will get, on average, the biggest COLAs. This is because their starting points are higher. When I talk about benefit hikes, I’m not talking about percentage points. I’m talking about dollars. It is because COLAs are set as a percentage of present payments that retirees who get bigger benefits will always get bigger COLAs.
Why do retirees in some states receive more benefits than others?
If the COLA for 2025 is 2.6%, the average retired worker in New Jersey and Massachusetts will get an extra $54.60 a month next year. That’s $2,100 times 2.6%. About $50.60 to $54.60 more a month would be added to benefits in the 10 states with the biggest raises. Some retirees in some states will get more benefits because the median income in those places is higher. Five of the states above have median incomes that are in the top ten: New Jersey, New Hampshire, Maryland, Washington, and Massachusetts. Also, the median incomes in three states are higher than the federal rate. These are Connecticut, Delaware, and Minnesota.
Chance is another reason why retirees in some places get more money from Social Security. There will always be people who decide to move when they retire. In that case, their benefit would not be linked to the state’s typical income. This could be the reason why California and Washington, D.C., are two of the 10 states or areas with the highest median incomes but the lowest median Social Security benefits. A higher than usual number of workers may decide to move after they retire because of the relatively high cost of living in both places.