For the millions of people who rely on Social Security, any change to these benefits is more than just a number; even if the percentage change is small, it means the difference between meeting basic needs and feeling safe from any unforeseen event or staying vigilant at all times for what may happen with inflation.
This 2025 will bring very good news, as the increase in benefits will increase by 2.5% (we will explain everything to you now, don’t be impatient), providing a small economic respite for those who face economic uncertainty every day in this inflationary environment.
Below, we will go over this change in detail and how it will benefit all Social Security recipients!
What is the COLA?
The Cost of Living Adjustment is a small percentage added to each Social Security payment with the goal of ensuring that its beneficiaries do not feel the effects of inflation in their pockets.
To put it another way, it means that each payment made by Social Security (whether an orphan’s pension, a retirement pension, or a disability pension) will have a percentage added to it so that beneficiaries maintain their purchasing power and can buy exactly the same thing with the same money at a time when prices are rising.
How is it calculated?
The Consumer Price Index for Urban Wage Earners (CPI W), as measured by the United States Department of Labor, is adjusted from one year to the next. By 2025, this increase will be 2.5%, which equates to about $50 more per month for each retiree.
This year’s figure is significantly lower than that of 2024 (+3.2%) and the historic +8.7 in 2023. This is not bad; it simply indicates that there has been a noticeable improvement in the country’s economic data, though the situation has not yet reached the point where this percentage does not need to be added.
The COLA is important for family economies because it compensates for food prices and other essential family expenses.
Let’s talk about Mississippi: who is going to benefit the most?
In Mississippi, approximately 470,000 people rely solely on social security income (they are retirees!), with an additional 106,000 disability beneficiaries and over 43,000 widowed individuals.
So, of course, this small increase will directly benefit these people, providing some economic relief in a state where so many people rely on these payments (they are their primary source of income).
Supplemental Security Income (SSI) recipients will see updated payments beginning December 31st, while Social Security recipients will see them beginning in January 2025.
At what age can I start receiving Social Security?
Recent changes confirm that the Full Retirement Age (FRA) will be 67 (for those born after 1960), but if you were born in 1959, you may still be able to retire at 66.7.
On the other hand, there is the option of early retirement, which is available beginning at age 62, but this means that the maximum amount you receive in payments will gradually decrease until you lose 30% of your benefits!!
Summary of key changes for 2025
- You’ll be able to find out the exact amount through the My Social Security app.
- The Social Security Administration will email or text you more information about this change.
- Yes, the 2025 changes come with a new income limit, and payments will increase from $168,600 to $176,100, meaning that people with higher salaries will also contribute more to the Social Security fund.
- Medicare will also have its changes, and it will be available on its website
- We’ll have to prepare our wallets for 2025 to arrive!
Also See:- SSI Payments – Find out if you will receive $484, $967 or $1,450 on your next deposit
