People who get Social Security benefits have until the end of November to do something before it is too late and their monthly benefits are lost. Social Security has a lot of rules and can be hard to understand, but there are some dates that retirees should keep in mind.
The cost of living adjustment (COLA) for the year usually comes out in early to mid-October. Retirees know that, depending on their birthday, their monthly benefits will be paid on a Wednesday.
Now that the year is almost over, all seniors who get Social Security should make November 20th another event to remember.
Everything is about to change in Social Security in two months
Many months of waiting, the Social Security Administration has finally said that the COLA will go up again in 2025. Every year, benefits are raised to keep up with inflation and keep the purchasing power of benefits.
The recent rise in inflation has been good for retirees because it has led to nice benefit increases. As of this year, inflation has finally slowed down. This hurts COLAs but slows the rise in prices for consumers, lowering the cost of living.
The SSA says that the COLA will be 2.5% next year, which is the lowest level in four years.
It was about $1,921 a month, or $23,052 a year, for retirees to get Social Security in September. With a 2.5% rise, the average monthly benefit will go up to $1,969, or $23,628 a year.
Social Security beneficiaries should consider creating an annual budget
When the new benefit payments start in January 2025, each person will get a different amount. This is because it depends on when they started getting benefits, how long they worked, and how much they made during their careers.
When someone retires, Social Security can be a big part of their income. According to the SSA, as of June 30, this year, about 90% of people over 65 were getting benefits that made up about 30% of their income.
But keep in mind that 42% of women and 37% of men who get monthly benefits depend on them for half or more of their income, while 12% of men and 15% of women who get monthly benefits depend on them for 90% or more of their income.
Also, retirees might find it helpful to know how much Social Security they will get next year before they start making a budget.
That is why all retirees should open their own Social Security accounts by November 20th.
Beneficiaries can use the free account to manage their current benefits, guess how much they will get in the future, check the status of their claims, get new Social Security cards, and get 1099 tax forms.
When retirees log in to their accounts in early December, they can see their COLA notice and find out how much their benefits will go up the following year. But retirees need to make their accounts before November 20 in order to get the notice.
The SSA will send a fiscal letter regarding the COLA increase for 2025
A lot of people try to stay away from the internet whenever they can, so one of these accounts is not needed. The SSA will send out paper COLA notices all through December.
Making a budget for your money, on the other hand, can help you make better choices. An important part of budgeting is knowing how much money you have to spend.
That is why it might be a good idea to create your My Social Security account before November 20 so that you can start getting payments right away. Those of you who decide to make a budget might find these ideas helpful:
- Calculate your after-tax income to determine how much money you will need to spend.
- When estimating accommodation, transportation, and food expenses, be conservative. Things rarely go as planned.
- Try to set aside a little money each month for unforeseen needs.
- Track your progress to identify areas where you overspent and improve your predictions in the future.
