The Social Security program has many rules and can be complex, and there are certain dates retirees should mark on their calendars. For instance, retirees know that they will receive their monthly benefits on a Wednesday, depending on when their birthday is, and that the annual cost-of-living-adjustment (COLA) usually comes out in early to mid-October.Â
Now, with the year winding down, all Social Security retirees should mark Nov. 20 as another date to remember. Here’s why.
Your 2025 COLA
In October, the Social Security Administration (SSA) announced the COLA for 2025. Each year, benefits are increased to help maintain purchasing power with inflation. Inflation has soared recently, so retirees have experienced some nice benefit hikes.
Inflation finally slowed this year, which is bad for COLAs but does slow the rise in consumer prices, ideally making the cost of living more manageable.
The SSA announced that next year’s COLA will be 2.5%, the smallest COLA in four years. The average Social Security check for retirees in September was roughly $1,921, or $23,052 annually. The 2.5% increase will bring the average monthly benefits to $1,969, or $23,628 annually.
New benefit payments will begin in January 2025, but everyone receives different amounts based on when they started claiming benefits, how many years they worked, and how much they made in earnings throughout their careers. Social Security can be a significant portion of a retiree’s income.
Nearly nine out of 10 people over 65 received benefits as of June 30 this year, according to the SSA, and benefits represent roughly 30% of income for people over 65.
However, note that 37% of men and 42% of women who collect benefits use Social Security for at least half of their income, while 12% of men and 15% of women rely on Social Security for at least 90% of their income.
