The Social Security program has many rules and can be complex, and there are key dates that retirees should keep in mind. For example, retirees know that their monthly benefits are paid on a Wednesday, depending on their birthdate, and that the annual Cost of Living Adjustment (COLA) is generally announced in early to mid-October. Now that the year is ending, all Social Security retirees should remember November 20.
In October, the Social Security Administration (SSA) announced the COLA adjustment for 2025. Each year, benefits increase to help maintain purchasing power in the face of inflation. Inflation has surged recently, so retirees have experienced some substantial benefit increases. However, inflation finally slowed down in 2024, which negatively impacts COLA but ideally makes the cost of living more manageable.
Social Security—What the 2.5% Cost of Living Adjustment Means
The SSA announced that next year’s COLA will be 2.5%, the lowest COLA in four years. The average Social Security check for retirees in September was about $1,921 or $23,052 per year. The 2.5% increase will make average monthly benefits approximately $1,969, or $23,628 per year. New benefit payments will begin in January 2025, but each individual’s amount varies depending on when they started receiving benefits, how many years they worked, and how much they earned over their working life. Social Security can represent a significant portion of a retiree’s income.
According to SSA, nearly 9 out of 10 people over age 65 received benefits as of June 30 this year, and these benefits account for about 30% of income for those over 65. However, 37% of men and 42% of women rely on Social Security for at least half of their income, while 12% of men and 15% of women rely on it for at least 90% of their income.
To get more information about your benefits, visit My Social Security, Relevant Information, Here’s How to Register
It can be extremely helpful for retirees to know the amount they’ll receive in Social Security benefits for the coming year so they can start budgeting. For this reason, all retirees should create their My Social Security account before November 20. The account is free and allows retirees to request a replacement Social Security card, receive a 1099 tax form, check the status of an application, calculate future benefits, and manage current benefits.
Steps to Create Your My Social Security Account
- Open the tab, create an account, and enter your email address and preferred language, then click submit.
- On the next screen, you’ll be asked to verify your email address. You can also request a new verification email or update your email address.
- Check your email for a button to confirm your login.gov email. Click the button to return to the website.
- Now, create a password for your account. The password must be at least 12 characters.
- Set up two-factor authentication. You can use an authenticator app, text message or phone call, backup codes, a physical security key, or a government employee ID. Follow the steps to set up your chosen authentication method and click continue.
