The Social Security Administration is ready to add the new cost of living adjustment (COLA) for 2025 to the benefits that people will get next year. This was made official by the Social Security Administration.
Social Security is important for most retirees because it gives Americans aged 66 and up about 30% of their income.
Indeed, the Social Security Administration (SSA) says that among people aged 65 and up, 15% of women and 12% of men get 90% or more of their income from Social Security.
Beneficiaries of Social Security usually get more money each year to help them keep up with inflation. This is one of the great things about the program. Not many people were happy when the latest COLA was announced.
Social Security announced monthly benefits will increase on January 1st
Millions of people who depend on Social Security benefits to pay their bills are very interested in the cost of living adjustment (COLA) increase. Just now, it was announced that the next COLA will be 2.5% and start in 2025.
That is very close to the average annual raise of 2.6% over the last 20 years. In the table below, you can see some recent Social Security COLAs:
| Year | COLA increase |
| 2015 | 1.70% |
| 2016 | 0% |
| 2017 | 0.30% |
| 2018 | 2% |
| 2019 | 2.80% |
| 2020 | 1.60% |
| 2021 | 1.30% |
| 2022 | 5.90% |
| 2023 | 8.70% |
| 2024 | 3.20% |
People who will benefit need to know that they are not the only ones who thinks a 2.5% rise is not important. A poll from the Motley Fool found that 54% of retirees did not think it was enough.
In fact, 31% of those who answered thought it was “completely inadequate.” It is easy to see why beneficiaries think what they do since, as of September, the average monthly retirement benefit was just over $23,000 a year.
That much money would not be enough for most of us to live on when we retire. It only goes up to $23,641 if you raise it by 2.5%, which is an increase of about $577 or $48 a month.
Plus, COLAs will always let people down unless they are connected to the CPI-E instead of the CPI-W, which is a better way to measure inflation.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI–W) is meant to show how much workers spend, while the CPI–E is meant to show how much older people spend.
As a result, it puts more emphasis on things like medical care, whose costs have gone up more than usual.
How can beneficiaries plan their retirement without depending too much on Social Security?
You probably get bigger Social Security checks because you made more money than usual while you were working, but they might not be enough to meet all of your needs and wants.
So, getting ready for retirement is very important. It is smart to set up more than one way to make money for your retirement. Without a doubt, investing wisely and saving hard are important for retirement.
Figure out how much money you will need when you retire, and then make a plan to save it. During retirement, you might have the following types of income:
- have worked part-time work before retirement.
- Social Security benefits.
- Stock dividend income.
- Rental checks from properties you own and rent.
- Income from one or more pension plans.
- Retirement income from one or more jobs you and/or your spouse had.
- Income from selling stocks in your portfolio as needed.
- income from investments that pay interest, including bonds, CDs, bank accounts, etc.
- Inheritance.
If you are creative, you can find other ways to make money, like cashing out a life insurance policy, getting a reverse mortgage, board up a property, and so on.
Putting off retirement for a few years can make a big difference and give you more money to spend. No matter how you do it, working toward paying for most of your retirement on your own is a good idea.
Take the time to make a good plan, and then make sure it gets done right. Besides that, Social Security probably will not cover most of your retirement income, and you do not want it to.
Also see:-Goodbye to SSI Check in December – Social Security Announces It in its Schedule
