More than 65 million Social Security beneficiaries in the U.S. are expected to see an increase in their monthly payments starting January 2025. The upcoming cost-of-living adjustment (COLA) will likely be around 2.5%, based on estimates from The Senior Citizens League (TSCL). This change, which will officially be announced by the Social Security Administration (SSA) in October 2024, aims to help seniors and other recipients keep pace with inflation and the rising cost of living.
How Will This Affect You?
The average monthly benefit for retired workers currently stands at $1,920.48. With the estimated 2.5% COLA, recipients could see an additional $48 in their monthly checks, bringing the average benefit to about $1,968.48. For those relying heavily on Social Security, this increase offers some relief, especially as inflation has impacted the cost of essentials like food, housing, and healthcare.
Why Does COLA Matter?
COLA is crucial because it ensures that Social Security benefits do not lose purchasing power over time. Each year, the SSA reviews changes in consumer prices, and if inflation is detected, they adjust benefits to help recipients maintain a standard of living that matches rising prices. This adjustment is especially vital for seniors on fixed incomes who rely on Social Security as their primary source of income.
What’s Next?
Although a 2.5% increase may seem modest, every dollar counts when managing tight budgets in retirement. The official COLA announcement will be made in October 2024, and the new payments will go into effect in January 2025.
