The Social Security Administration (SSA) is the part of the US government that sends millions of dollars to people across the country who are eligible for retirement, widow, and disability insurance (RSDI) and Supplemental Security Income (SSI). The agency just recently announced that retirees will be getting more money, but some states will get more than others.
The cost-of-living adjustment (COLA) tells the Social Security Administration how much to change the monthly payment amounts every year. The cost-of-living adjustment is meant to help seniors keep their buying power even as the prices of goods and services go up. The change in inflation is used to measure this shift, but it won’t be made public for another two months.
A new increase was announced by Social Security in retiree paychecks
The Senior Citizens League said earlier this week that next year’s pay will go up by 2.6% COLA. That would be the smallest rise that people have gotten since 2021. But not every state gets the same amount of benefit raises every month.
Some seniors in some states may get more money from Social Security than others because of how the program is set up. The amount of money you get from Social Security may change based on when you first apply and how much you’ve earned over your lifetime.
Because of this, your monthly payments will go up based on your salary and how long you wait to ask for help. Recent study from The Motley Fool says that these factors would make some states get bigger Social Security payments than others.
Based on the cost of living adjustment (COLA), this is done so that Social Security payments can be raised in states where the median wage is much higher than in other states. The study found that the states with the highest median monthly Social Security payments were:
- 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
The reason behind some states in the US seeing higher COLA increases compared to others
Alex Beene, a teacher at the University of Tennessee at Martin who teaches people about money, talks about why Social Security has gone up more in some places than others. He also said that it’s not because of complicated calculations for giving out benefits.
But the median income in these places is higher than the national average, which shows in the Social Security benefits that people get. Then, SSI recipients in these states are likely to get the biggest COLA increases because their current monthly payment is bigger on average.
The average retiree in New Jersey will get $54.60 more in Social Security benefits if the current cost of living adjustment (COLA) estimates are correct. It would cost $50.60 more in Massachusetts. Higher average income can be found in the states above.
New Jersey, New Hampshire, Maryland, Washington, and Massachusetts are in the top 10. But there’s more to the story than just income that shows why these areas will gain more from the bigger cost-of-living adjustments. Some seniors are choosing to stay in their retirement communities, even those who have more money to spend.
According to the Motley Fool, Washington, D.C., and California have some of the highest median Social Security payments but the lowest incomes. This is because people are moving to other states.
Finally, it is important to note that retirees who don’t live in one of the top 10 states can still expect a big boost in their benefits, since the cost of living adjustment is given to all of them, no matter where they live. Alex Beene said, “Your Social Security income will go up a lot the next year to deal with rising prices, even if your state doesn’t make the top 10.”