The Social Security Administration (SSA) changes the amounts of people who get Social Security every year to keep up with inflation. Cost of living adjustments (COLA) for 2025 will be made public on October 10, 2024. In 2024, Social Security benefits went up by 3.2%, but next year, they will go up by less because inflation is going down.
About 68 million Americans will get monthly Social Security checks worth a total of $1.5 trillion in 2024. The Bureau of Labour Statistics figures out the CPI-W, which stands for the Consumer Price Index for Urban Wage Earners and Clerical Workers.
It is based on how much rent, food, and transportation usually cost. This number is linked to the COLA. The COLA for each year is based on the CPI-W for the third quarter of the time before. The COLA for 2025 will be released in October 2024, based on data gathered from July to September.
How much extra money will retirees earn with the new Social Security checks increasing?
A study done by Gallup in April found that more than one-third of retirees see their checks as a major source of income. Since 1975, SSA has changed payments at the start of every year to keep up with inflation.
Each year, this amount goes up because of changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The recent rise in inflation after the pandemic caused the COLA to go up, as explained here:
- 2021: 1.3%
- 2022: 5.9%
- 2023: 8.7%
- 2024: 3.2%
Benefits may last, but they don’t always do. Since it began in 1975, the COLA has only been 0% in 2009, 2010, and 2015. So that seniors can better handle rising costs, these changes have been made. The Consumer Price Index has gone up by 24.6% since 2021.
If the adjustment for 2025 stays at 2.5%, SSA payments will have nearly caught up, going up by 23.4% over time. More than that, it’s important to know that the Social Security Administration will announce the COLA for 2025 on October 10, 2024.
Both the Boston College Centre for Retirement Research and the non-profit Senior Citizens League think that the rate will go up by 2.5%. If this is true, the rise from 3.2% in 2024 will be replaced by a rise that happens more slowly.
The US Bureau of Labour Statistics says that inflation has continued to drop from the highs it reached after the pandemic. According to the Consumer Price Index report for August 2024, prices have gone up by an average of 2.5% since August 2023. This is the smallest 12-month rise since February 2021.
If there was a 2.5% COLA, the average monthly Social Security check for retired workers would go up by $48 to $1,966 under the COLA. People who get Social Security payments will get a formal letter in the mail in December about their benefits for 2025.
But starting in the middle of November, you can use your mySocialSecurity account to get that information online. If you want to know how much more everyone will earn through Social Security now that checks are bigger, read on:
| Retirement benefits | Social Security checks | 2.5% COLA increase | Extra income |
| On average | $1,900 | $1,948 | $48 |
| Age 62 | $2,710 | $2,778 | $68 |
| Age 67 | $3,822 | $3,918 | $96 |
| Age 70 | $4,873 | $4,995 | $122 |
| Survivor benefits | Social Security checks | 2.5% COLA increase | Extra income |
| On average | $1,505 | $1,543 | $38 |
| Individual | $1,773 | $1,817 | $44 |
| 2 Children | $3,653 | $3,744 | $91 |
| Disability benefits | Social Security checks | 2.5% COLA increase | Extra income |
| On average | $1,537 | $1,575 | $38 |
| Blind recipients | $2,590 | $2,655 | $65 |
| Maximum payment | $3,822 | $3,918 | $96 |
| SSI benefits | Social Security checks | 2.5% COLA increase | Extra income |
| On average | $698 | $715 | $17 |
| Individuals | $943 | $967 | $24 |
| Couples | $1,415 | $1,450 | $35 |
| Essential person | $472 | $484 | $12 |
Remember that these monthly payment amounts were based on the Senior Citizens League’s 2.5% prediction, and they could change if the final COLA number is different. Next week.