Millions of people who get Social Security are waiting for the Social Security Administration (SSA) to say how much their payments will go up next year as the end of the year draws near. All beneficiaries will see a rise in their monthly payments, but some will get more money than others.
The annual raise is due to the cost of living adjustment, which is announced in October at the end of the year. Its goal is to help Americans keep up with inflation even when the prices of goods and services go up.
The Social Security Administration says that Social Security protects the retirements of most U.S. workers who pay into it through payroll taxes and most older workers aged 60 to 89 who are getting benefits or will be getting them. The fact that almost everyone is covered by Social Security has many important benefits.
It gives people of all income levels a basic amount of security in retirement. Individual savings and private pensions are encouraged because the program is not based on income and does not cut or deny payments to people whose income or assets are higher than a certain level.
Social Security also gives out more each year than private pension plans because it invests without risk, doesn’t offer lump-sum or bequest payments, and has lower overhead costs. This makes it a good way to save for the long term.
Because everyone can join and there are no tests to see if someone needs help, Social Security is easy to run; the costs of running it are only 0.5% of yearly benefits. This means that testing would make it very hard for beneficiaries and managers to report and process information, which would make it less useful and save less money.
Social Security confirmed a paycheck increase in 2025
The Senior Citizens League posted predictions earlier this week that say benefits will go up by 2.6% COLA in 2019. That would be the smallest rise since 2021 for receivers. But each state gets a different kind of monthly rise in benefits. Some seniors in some states may get more money from Social Security than others because of how the program is set up.
Your exact benefit amount may change based on when you start getting Social Security and the specifics of your record of earnings over your lifetime. Because of this, your monthly payments will go up based on how much money you make and how long you wait to file for benefits.
A new study from The Motley Fool found that these things would make it so that some states would get more in Social Security payments than others. Based on the cost of living adjustment (COLA), Social Security benefits can be raised in states where the typical wage is much higher than in other states. The study found that the states with the biggest 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 states that will see higher COLA increases compared to others?
According to Alex Beene, a financial literacy teacher at the University of Tennessee at Martin, larger Social Security increases in some areas are not because of complicated calculations for how to distribute benefits. Instead, they are due to higher median wages than the national average, which is reflected in the benefits recipients receive.
Then, people who get Social Security in these places are likely to get the biggest COLA increases because, on average, they are getting more each month. For example, if current cost-of-living adjustment estimates are correct, the average retiree in New Jersey will get an extra $54.60 in Social Security benefits. In Massachusetts, that amount would rise to $50.60.
New Jersey, New Hampshire, Maryland, Washington, and Massachusetts are among the ten states with the highest average wages. The full story behind why some places will see bigger cost-of-living adjustment (COLA) increases is more complicated than just income, though. Some wealthy retirees choose to stay in the same neighborhood’s even after they stop working.
The Motley Fool says that California and Washington, D.C., have some of the best wages but the lowest average Social Security payments. This is because retirees are leaving those states and moving to others. Furthermore, it is important to note that the cost of living adjustment affects seniors’ benefits no matter where they live. This means that people who don’t live in one of the top 10 states can still get a big boost in their benefits.