According to Vibes.okdiario , As the end of 2024 approaches, retirees relying on Social Security benefits should be aware of important dates and updates that can help them manage their finances effectively. The Social Security program undergoes annual adjustments, with the most significant being the cost-of-living adjustment (COLA), which is designed to help retirees keep up with inflation.
Social Security COLA for 2025
Each October, the Social Security Administration (SSA) announces the COLA for the upcoming year. For 2025, the COLA will be 2.5%, the smallest increase in the past four years. This adjustment is designed to preserve retirees’ purchasing power amid inflation. While inflation has been lower in 2024 compared to previous years, retirees will still see an increase in their benefits. The average monthly benefit will rise from $1,921 to approximately $1,969, equating to an annual income of $23,628.
It’s important to note that the exact benefit amount for each individual depends on various factors, including the age at which they began receiving benefits, their years of work, and their lifetime earnings.
Why November 20 is a Key Date for Retirees
November 20, 2024, is an important date for retirees who receive Social Security benefits. Retirees are encouraged to create a free account on the SSA’s online portal, “my Social Security,” by this date. Setting up this account allows retirees to directly access the 2025 COLA increase notification online, providing them with accurate information about their benefit adjustment.
By early December, all beneficiaries will be able to view the exact increase in their payments, helping them plan for the upcoming year’s budget more effectively.
Benefits of a “my Social Security” Account
Having a “my Social Security” account offers retirees several benefits beyond just receiving COLA notifications. This platform provides a secure and convenient way to:
- Request a replacement Social Security card
- Access the 1099 form for tax purposes
- Check the status of any applications
- Estimate future benefits if they have not yet started receiving them
- Manage current benefits
This online portal simplifies the process of managing Social Security benefits and ensures retirees have access to up-to-date information when needed.
The Impact of Social Security on Retirees’ Income
Social Security is a vital source of income for the majority of retirees. According to SSA data, nearly 90% of individuals over age 65 receive some form of Social Security benefit, which makes up about 30% of their total income on average. For many retirees, Social Security plays a more significant role. Around 37% of men and 42% of women rely on Social Security for at least half of their income, and for some, it accounts for nearly all their income—covering up to 90% for about 12% of men and 15% of women.
Given these figures, the annual COLA increase has a direct impact on retirees’ financial well-being. Understanding the precise monthly benefit amount is essential for managing household expenses and planning for the year ahead.
How COLA and Key Dates Aid in Financial Planning
For retirees, knowing the exact amount of their Social Security benefits and understanding when COLA increases will take effect is crucial for budgeting. While the 2.5% increase in 2025 is modest, it provides a much-needed adjustment for those facing rising costs. It is also a reminder that the Social Security program’s COLA helps ensure benefits keep up with inflation, particularly in uncertain economic times.
Key dates like November 20, along with tools such as “my Social Security,” ensure that retirees are kept informed about their benefits and can plan accordingly for the year ahead.
Staying up-to-date with Social Security changes and using available resources allows retirees to make the most of their benefits, ensuring financial stability in their retirement years.
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