This Just In: Social Security Announcement for 2025 & What You Need to Know
On October 10, 2024, the Social Security Administration announced that more than 72.5 million Americans will see a 2.5% Cost of Living Adjustment (COLA) to their benefits in 2025. This adjustment is designed to help your Social Security payments keep up with the rising cost of living.
Starting in January 2025, the average Social Security check will increase by about $50 per month. Although this is a smaller increase compared to the 3.2% adjustment in 2024, it’s more in line with historical averages now that inflation has slowed. For reference, 2023 saw an 8.7% increase—the largest in four decades—while 2022 brought a 5.9% rise.
The annual COLA is based on inflation data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Some senior advocacy groups argue that using an index that more accurately reflects the spending habits of older Americans would provide better adjustments, especially as many continue to face challenges with rising costs. For about 40% of older Americans, Social Security is their primary source of income.
To estimate your new monthly benefit, multiply your current payment by 2.5%. Keep in mind that Medicare premiums could also affect the final amount. For instance, the standard Medicare Part B premium is expected to rise to $185 per month in 2025, up from $174.70 in 2024, so stay tuned while we keep an eye out for any & all announcements!
If you have any questions about these changes or how they impact you, please reach out to your ACM Wealth Advisor.
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