You can finally find out how much and why your Social Security payments will go up after a much longer wait and dozens of articles popping up everywhere.
It is smart to know how much your payments will go up every year. This will help you plan your costs for next year and see if the higher payment will make up for the effects of inflation on your daily life.
You, too, as an American, are affected by price increases over time. You might think that they do it in large groups at once.
In reality, though, the growth is slow and affects different goods and services at different times depending on the needs of each industry. Because of this, you might see small price increases in the things you normally buy.
However, a lot of people do not add up those small amounts over time to see how much the price increase has hurt their ability to buy things.
If you know how the Social Security Administration (SSA) handles people and decides how much their benefits should go up every year, you can start to predict and understand the signs that the economy sends that will show you how much your payments will change. If you want to fully understand this subject, keep reading.
What is the process for increasing your Social Security payments?
To begin, you need to understand why your Social Security payments need to be changed. This will help you understand how the SSA’s process works.
The amount of money that people get from Social Security needs to be changed because over time, inflation will make the payments less valuable until they can not be used anymore.
The purpose of Social Security programs was to help people get out of poverty in the United States. If the money sent by the government does not help, then something is not working.
The SSA made a standard method that uses data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to figure out how much of a boost should be given.
This price index keeps an eye on more than 200 goods and services and decides how important they are by looking at what families whose main breadwinner works a wage-paying or clerical job buy.
The CPI-W is calculated every month by the Bureau of Labor Statistics (BLS). The average of the numbers from the third quarter of the year (July, August, and September) is used to figure out COLA.
Then, this value is compared to the same calculation from the previous year to see how big the change has been.
This makes an index that shows how prices really have changed over time. After that, the value is made public in October and used in January of the next year.
How much are your Social Security payments expected to increase?
The SSA says that in 2025, your Social Security payments will go up by 2.5%.
This is the smallest increase since 2021. The CPI-W numbers could predict this pattern, so we suggest that you get them as soon as they come out so that you can guess where next year’s COLA will go. July was at 2.9%, August was at 2.6%, and September was at 2.4%.
Because of this, there was no way to make more than 3%. This can be annoying, but there is a bright side: it means that inflation is not having a big effect on the economy, so your purchasing power will stay pretty stable.
Why is the increase in Social Security payments maybe not enough?
Seniors’ groups, like the Senior Citizens League (TSCL), do not like how COLA is calculated because CPI-W only looks at families in general, not just people who get Social Security benefits.
When you think about it, the costs that seniors and retirees face are very different from those of the average family. Mostly when we look at things like the cost of health care.
Because of this, the BSL came up with an unofficial measure in 2023 called the CPI-E (where “E” stands for “elderly”). It has become popular because it may better show how changes in prices affect that group of Americans.
Also see:-Goodbye to Social Security Payments This Week – It’s Official, No Check Payments Will Be Issued
