The rules concerning the Social Security program can be intricate, and retirees should keep some key dates in mind. Monthly benefits are paid out on specific Wednesdays relative to birth dates, and the cost-of-living adjustment (COLA) is announced between the first and second half of October. Now, as the calendar year nears its end, retirees must remember one more critical date: November 20.
In October, the Social Security Administration (SSA) announced a 2.5% COLA increase for 2025, aiming to help retirees maintain purchasing power amid inflation. Though inflation has slowed this year, impacting COLA, the average monthly Social Security benefit will still increase from $1,921 to $1,969, or roughly $23,628 annually. New benefit payments reflecting this increase will start in January 2025, although the amount will vary depending on factors like the age of beneficiaries, career earnings, and years worked. Social Security forms a significant income source for many retirees, with 90% of Americans over 65 receiving benefits, which make up around 30% of their income on average. Moreover, many men and women rely on Social Security for over half or even 90% of their income.
Retirees urged to open a “my Social Security” account
Understanding the upcoming benefit adjustments is essential for effective retirement budgeting. Therefore, all retirees are urged to register for a “my Social Security” account by November 20 to access various essential services, including checking their COLA adjustments, managing benefits, replacing lost Social Security cards, viewing IRS forms, tracking applications, and performing future benefit calculations. Failing to register by November 20 may delay or disrupt your Social Security benefits.
For those preferring traditional mail, the SSA will still issue paper COLA notices in December. However, having a “my Social Security” account allows retirees to view their benefit increases online sooner, facilitating better planning for the year ahead. Opening the account takes only a few minutes, and it provides retirees with easy access to the latest updates on their benefits.
Since budgeting plays a crucial role in retirement planning, here are some tips: assess post-tax spending expectations, project moderate expenditures (such as housing, transportation, and food), allocate part of the monthly income to cover unforeseen expenses, and monitor outgoing funds regularly to create a well-informed budget.
Many retirees are also unaware of the Supplemental Security Income (SSI) they may be eligible for. According to experts, many Americans can improve their retirement income by understanding Social Security’s often-overlooked “secrets,” which could add up to $22,924 annually. Informed navigation of Social Security can make retirement more financially secure and manageable.
