This week is a good one for retirees in the US because this Thursday they will finally find out how much their new Social Security check will be after the cost of living adjustment (COLA).
The 2025 cost-of-living increase will be made public by the Social Security Administration on October 10, 2024. Until then, you’ll have to guess what it might be. From what we know now, the COLA seems to be less than what people in the program have seen in past years.
This is disappointing news for retirees who are already having a hard time with rising costs and limited ways to make money in retirement. And yet, it’s important to remember that everyone’s check goes up in a slightly different way before you get too worried. If you want to know if your income will rise above average this year, read on.
Social Security will confirm the next check increase on Thursday
When the new COLA goes into force, Social Security benefits will go up by the same amount. The dollar rise changes, though, because everyone gets a different amount of benefits.
As of August 2024, the average weekly Social Security payment for older people is $1,920. For example, if you are already getting more than that amount, this means that you will make an above-average 2025 COLA.
The most current estimates from the Senior Citizens League put the COLA at about 2.5% in 2025. It would cost $1,968 a month instead of $1,920, which is an increase of $48.
If your current Social Security check is more than the average of $1,920, you should expect to get an extra $48 or more every month as long as the COLA doesn’t come in lower than this estimate.
To get a rough idea of how big your checks will be in 2025, add 2.5% to your current checks. Remember that this is just a rough estimate; the real number will be released on October 10.
What should retirees do if the COLA increase is not enough?
There’s a good chance that the 2025 COLA won’t be enough to make up for the cost of living raises that some retirees have seen in the last year. It’s discouraging, and many people think it’s because of how the government calculated the original COLA.
Since the government is the only one who can change this, retirees will need to find other ways to make money to supplement Social Security. Even though it’s good to have savings, a lot of people don’t have enough for retirement, so they need to find other ways to make money.
Going back to work isn’t ideal, but it can promise a steady monthly income. You can also go back to doing the things you did before you retired. Over-50s often look for jobs that give them more freedom to do the things they enjoy. Part-time and online work may also give you more choices.
Remember that all you need to do is make enough to add to your savings and Social Security. There’s also a chance that you could get extra help from the government to pay for things like rent, food, utilities, and medical care. But if you think you might need them in 2025, you should apply as soon as possible because the government needs time to look over these forms.
The government needs time to look over these forms, so if you think you might need them in 2025, you should send yours in as soon as you can. Once the cost of living adjustment (COLA) for 2025 is out, you can start making plans for your spending for the next year if you haven’t already.
Plan ahead before January to figure out how much money you can take out of savings and how much you can get from other sources to pay your bills.
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