People who get Social Security benefits can now find out how much their monthly check will go up because the time is just about up. There are only two weeks left until the last piece of the puzzle is put together and the percentage that will change all Social Security systems can be found.
You may have heard in the news that people are getting more worried about the changes that will happen to Social Security in 2025. We all know that the system has had trouble keeping track of and paying its recipients, and that a lack of money is one reason for this.
It is a fact that the Old Age, Survivors, and Disability Insurance (OASDI) programs are set up in a pyramid-shaped way that depends a lot on how many people contribute to the “base.”
But birth rates won’t be going up any time soon, according to population trends in all modern countries. This will make the system more difficult because fewer new Americans will join the workforce and pay Social Security taxes.
So, the SSA supervisor would be under more pressure to find new ways to bring in the money that is needed to pay each Social Security check.
This would lead to more calls for the government to have a bigger budget and indirect pressure on how benefits are changed over time. You need to know how things work now in order to understand how this could happen. To do that, please keep reading.
How is the Social Security Check increase determined?
The cost of living adjustment, or COLA, is the amount that is added to each Social Security check. As the name suggests, this is the ratio that the Social Security Administration uses to decide when to raise payouts and other values.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is also used in the process of figuring out the COLA, which changes each Social Security check for the next year.
A lot of different things and services are tracked to see how their prices change over time. This is what the CPI-W is all about. Then, these values are given more or less importance based on how families who make at least half of their money from pay or salaries like to spend their money and what they think is most important.
Every month, the Bureau of Labor Statistics (BLS) releases the CPI-W. For COLA reasons, the SSA takes the average of the numbers from the third quarter of the year (July, August, and September) and compares them to the same numbers from the previous year. The COLA for the next year is shown by this change.
The BSL has said that the CPI-W will be released on October 10 this year. Because of this, the new COLA value should be released in the second or third week of October. This will cause all Social Security checks to change in January 2025. Keep in mind that the COLA raise will also have an effect on other values managed by the SSA.
These include the monthly limits on earnings and assets for Supplemental Security Income, the maximum Social Security benefit at full retirement age (FRA), and the SSI student exclusion amount, among others.
What is the estimated increase of the Social Security Check for this year?
The Senior Citizens League (TSCL) says that the COLA for next year will be about 2.5%, which is a lot less than the 3.2% that was put in place in 2024. This is in line with the idea that inflation will be lower in the US economy as a whole. With this number in mind, the average Social Security check could go up by $48 a month, for a total bonus of $1,968.
This may seem low, but it is actually within the index’s 20-year average. This has big effects on every person who gets Social Security: their spending power will be less affected than in recent years, and inflation will have less of an effect the following year.
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