The month of December 2024 brings good news for retirees in the United States: the first payment of the annual cost of living adjustment, better known as COLA (Cost of Living Adjustment). This year, the increase will be 3.2%, designed to help offset the impact of inflation on a day-to-day basis.
This adjustment becomes a small financial respite for those who depend on their Social Security checks and marks the beginning of a slightly more bearable 2025 for their finances. This year, the COLA increase of Social Security wins the race a little bit against inflation, which until now has been 2.4%.
The COLA adjustment begins to be applied in Social Security payments
For retirees, the arrival of this adjustment could not be more timely. Inflation has significantly impacted commodity prices, so even if it is a modest increase, COLA is a welcome support. Various studies and surveys have shown that many retirees consider these payments an essential part of their budget.
in December 2024
In the United States, near 12% of retirees depend entirely on the benefits of Social security as their only source of income. This group, which does not have other sources of income such as savings or pensions, faces a complicated outlook: its average retirement savings is $46,926, a figure lower than the average annual expenses of a retired household, which is around $46,926. $54,975, according to data from the Retirement Living website.
Furthermore, the 60% of retirees They depend on Social Security for at least half of their income during their years, which undoubtedly underscores the relevance of the program throughout the country. Without the support of these benefits, it is estimated that approximately 22 million older adults would be in poverty.
COLA increase – It will be applied from December for a select group of beneficiaries
The December 31st check will be the first to reflect this increase, providing a small relief on monthly expenses. This cost of living adjustment aims to maintain the purchasing power of the beneficiaries, allowing them to better cope with the increase in prices of food, medicine, and other essential goods.
If you are one of the lucky ones to receive this raise, congratulations! The arrival of this new check on the last day of the year is a preview of a 2025 that starts a little more stable in financial terms. Although the COLA does not stop inflation, it is an important help to face expenses and maintain a decent standard of living. Remember to stay up to date with official information from the Social Security Administration (SSA) to learn more about the adjustments and how they may affect your budget throughout the next year.
The SSA advances Supplemental Security Income (SSI) benefit payments to December 31 when the original date falls on a holiday or weekend, as is the case this year on January 1, 2025, which is a holiday. This adjustment ensures that beneficiaries do not face delays in receiving the money needed for their basic expenses, since banks and other financial institutions are often closed on holidays. For this reason, SSI payments scheduled for January 1 are advanced to the last business day before to avoid interruptions and ensure timeliness of the benefit.