Even though inflation has been declining, seniors' spending plans are still somewhat tight. Above-average inflation over the last few years has resulted in large Social Security cost-of-living increases. Will these patterns persist? What is the projected Social Security COLA for retirees in 2025?
Even though inflation has been declining, seniors' spending plans are still somewhat tight. Above-average inflation over the last few years has resulted in large Social Security cost-of-living increases.(Photo : KAREN BLEIER/AFP via Getty Images)
In 2024, the Social Security COLA was 3.2%. Even though this year's Social Security COLA was far larger than most, it was still substantially less than the COLA for 2023.
Social Security COLA for retirees increased to an astounding 8.7% in 2023. Even while many retirees saw a significant gain in income, it probably didn't keep up with their rising living expenses.
What Will Be the Social Security COLA in 2025?
The announcement of the real 2025 SS COLA is not expected until October. However, you should be ready for this to be the lowest figure in the previous several years. The Social Security COLA in 2025 may be less than 2%.
The Senior Citizens League projects the Social Security COLA in 2025 to be merely 1.75% if we take the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, reading from January.
At this point in the year, the final COLA for the next year is probably going to change. In any case, Social Security recipients who retire in 2025 can expect a substantially lower COLA than they would in 2023 or 2024.
The Social Security Administration (SSA) utilizes the average inflation in the third quarter, based on the CPI-W, to determine how much of an increase in Social Security payments will be required for the next year in order to compute the Social Security cost-of-living adjustment for 2025.
A sizable portion of many Americans' retirement income comes from Social Security. For a few, it serves as their main source of retirement income. I hope your financial planner has been so enjoyable and has done such an amazing job for you that you aren't even aware of the annual Social Security COLA.
Unfortunately, not all retirees can say this. Approximately 15% of women and 12% of men, respectively, depend on Social Security for more than 90% of their retirement income, according to the Social Security Administration.
The average monthly Social Security benefit for 2024 was $1,907.00.
What's The Social Security Maximum Benefit?
The Social Security Administration states that the age at which you start receiving benefits after retirement will determine the maximum income benefit. For instance, in 2024, if you reach full retirement age, the greatest amount of Social Security you may get would be $3,822.
Nevertheless, your maximum Social Security payment would be $2,710 if you were to retire early in 2024 at the age of 62. The most benefit you may receive in 2024 if you wait to retire at age 70 would be $4,873.
Remember that these are the highest possible Social Security payouts. The majority of pensioners get far less money from Social Security.
Remember that these payments will not even come close to matching your pre-retirement income; your monthly amount will be decided depending on your income before to retirement. To make sure you can continue to live at your current quality of living in retirement, you need make some more retirement plans.
