Retirees have complained for decades about Social Security's declining buying power, even in the face of above-average cost-of-living adjustments (COLAs) the last few years. So many were undoubtedly excited when they heard reports of a $600 Social Security benefit increase set to happen with the June payments, the first of which went out on the 12th.
Unfortunately, these reports turned out to be false. The Social Security Administration added a header to its website to clarify the situation and direct people to information about how it calculates and administers COLAs. Here's what you need to know about the next real benefit increase and what it might look like.
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We have several months to go
The Social Security Administration didn't indicate where the rumors of a $600 Social Security payment bump came from, though several websites have now run with the story. To alleviate any confusion, the Social Security Administration clarified it will not issue another COLA until Jan. 2025.
The government traditionally issues COLAs with the December payment, which goes out January of the following year. It bases the COLA on the year-over-year change in third-quarter inflation data. Specifically, it looks at the annual Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for July, August, and September. Any year-over-year increase for this metric becomes the COLA. For example, the CPI-W increased 3.2% between Q3 2022 and Q3 2023, so that became the 2024 COLA.
With that in mind, the 2025 COLA won't be announced until Oct. 10, 2024. However, people are already speculating about what it might look like.
How much more will seniors get from Social Security in 2025?
The latest 2025 Social Security COLA projections from the Senior Citizens League estimate it will be around 2.66%. This would raise the $1,915 average monthly check as of April 2024 to $1,966 per month -- a $51 increase.
That's a far cry from $600, and it might be disappointing for seniors already struggling to make ends meet with their existing Social Security checks. But remember, this isn't set in stone. If inflation doesn't slow down as quickly as projected, this could lead to a larger 2025 COLA and more money for seniors. We won't know until October.
But the reality is next year's benefits still won't be enough on their own to cover most seniors' expenses. Many will need to rely on personal savings or remain in the workforce.
You might also be able to apply for additional government benefits, like supplemental security income (SSI). These are monthly benefits administered by the Social Security Administration to blind, disabled, and low-income recipients. The maximum supplemental federal benefit in 2024 is $943 per month for an individual or $1,415 per month for a couple.
Otherwise, keep an eye out for your 2025 COLA notice, which the Social Security Administration should deliver to you in December. This will tell you the precise dollar amount you can expect going into next year so you can plan your budget.
