For US retirees who depend on Social Security, knowing about changes to the program and important dates can help them better manage their money. A few things about this program change every year, mostly to keep up with the cost of living.
As 2024 comes to a close, there are a few important dates to keep in mind, especially for people who want to know their benefits for 2025 so they can make plans.
As a way to keep up with inflation, the Social Security Administration (SSA) announces the annual cost-of-living adjustment (COLA) every October. This is the first time in four years that the COLA for 2025 will be so low—2.5%.
The 2.5% increase in Social Security benefits for 2025
The COLA is meant to help retirees keep their purchasing power by reducing the effects of inflation. Due to high inflation rates in recent years, changes were bigger. However, inflation has slowed down in 2024, so the increase for 2025 will be smaller. In real life, this change will mean that the average monthly benefit will go up from $1,921 to about $1,969, which is $23,628 a year.
But the exact amount each retiree gets depends on when they started getting benefits, how many years they worked, and how much money they made over their lifetime.
Why November 20 is an important date for retirees
This year, November 20 is a very important day for all retirees who get Social Security benefits. The simple reason is that retirees are supposed to make an account on “my Social Security,” the SSA’s online portal, by this date. This account is free, and it lets users manage and look over all information about their benefits.
Retirees can get the COLA increase notice for 2025 directly online if they set up this account before November 20. Starting in early December, each beneficiary will be able to see exactly how much their payments will go up in January. This will help them make a better budget for next year.
Benefits of having a my Social Security account
Having a “my Social Security” account is helpful in more ways than just getting information about benefits. This platform makes a lot of tasks easier, which can be helpful for older people. People who get money from this account 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
Most retirees depend on Social Security as their main source of income. The SSA says that almost 90% of people over 65 get some kind of Social Security benefit. For most retirees, these payments make up about 30% of their total income. In some cases, Social Security is even more important.
In fact, about 42% of women and 37% of men who get benefits depend on Social Security for at least half of their income. For some, Social Security makes up almost all of their income. For about 12% of men and 15% of women, it covers up to 90% of their earnings.
Keeping these numbers in mind, the annual COLA increase has a direct effect on the quality of life for many retirees. That’s why it’s important to know the exact monthly benefit amounts so that you can plan for costs and make changes to your household budget.
How the COLA and other key dates aid in planning for the year
For retirees, knowing how much their Social Security will go up next year is important for planning their finances. With this year’s 2.5% COLA, some retirees may be able to use the extra money to pay for extra costs or save for unplanned expenses.
It’s important to remember that the annual adjustment makes sure that Social Security benefits stay valuable compared to the cost of living, even though this year’s increase is smaller. This is especially true when prices are going up.
Also, dates like November 20 and notifications through my Social Security help retirees stay up to date and make sure they have all the information they need to keep their benefits current and in good shape.
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