Staying up to date on program updates and significant dates might help US retirees manage their finances more successfully. This program’s exact components alter annually, particularly modifications to keep up with the cost of living. As the end of 2024 approaches, some crucial dates are worth noting, especially for individuals who want to know their benefits in 2025 and prepare ahead.
Each October, the Social Security Administration (SSA) releases the annual cost-of-living adjustment (COLA) to account for inflation. This year’s COLA for 2025 is set at 2.5%, the smallest increase in the previous four years.
The 2.5% increase in Social Security benefits for 2025
The COLA tries to assist seniors maintain purchasing power by mitigating the effects of inflation. While former years witnessed bigger changes due to high inflation rates, inflation moderated in 2024, resulting in a more modest increase in 2025. In practice, this change means that the average monthly benefit will increase from $1,921 to around $1,969, for an annual income of $23,628.
However, the actual amount paid to each retiree is determined by a number of circumstances, including when they began collecting benefits, how many years they worked, and their lifetime earnings.
Why November 20 is an important date for retirees
This year, November 20 is especially important for all seniors receiving Social Security benefits. The explanation is simple: retirees are encouraged to set up a personal account on the SSA’s web portal, “my Social Security,” by this date. This free account allows users to manage and review all benefit-related information.
By creating this account before November 20, retirees will be able to obtain the COLA rise notification for 2025 immediately online.
Starting in early December, each beneficiary will be able to know exactly how much their payments will increase beginning in January, allowing them to more correctly plan their following year’s budget.
Benefits of having a my Social Security account
Having a my Social Security account offers several advantages beyond just receiving notifications about benefits. This platform simplifies a variety of tasks that can be helpful for retirees. Through this account, beneficiaries can:
- Request a replacement Social Security card
- Access the 1099 form for tax purposes
- Check the status of any application
- Estimate future benefits if they have not yet started receiving them
- Manage current benefits securely
Overall, this account simplifies benefit management and helps users stay informed about updates, reducing potential delays or lapses in information.
The impact of Social Security on retirees’ income
The majority of pensioners rely on Social Security as their primary source of income. According to SSA data, approximately 90% of adults over the age of 65 get some type of Social Security payment. These payments account for approximately 30% of retirees’ overall income on average, while in other circumstances, Social Security plays an even greater part.
In fact, nearly 37% of men and 42% of women receiving benefits depend on Social Security for at least half of their income. For others, Social Security provides practically all of their income, accounting for up to 90% of wages for approximately 12% of men and 15% of women.
With these statistics in mind, each year’s COLA increase has a direct impact on many retirees’ quality of life, thus knowing the exact monthly benefit amounts is critical for anticipating spending and adjusting the household budget.
How the COLA and other key dates aid in planning for the year
Knowing how much Social Security will increase in the coming year is important information for retirees when managing their finances. With this year’s 2.5% COLA, some retirees may find the raise handy for meeting increased expenses or saving for unexpected needs.
It’s important to remember that, even if this year’s rise is modest, the annual adjustment ensures that Social Security benefits preserve their value against the cost of living, especially in an inflationary environment. Furthermore, dates such as November 20 and alerts through my Social Security help retirees stay current, ensuring they have the information they need to keep their benefits up to date and in good standing.
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