Once you apply for Social Security retirement benefits, you generally don’t have to do much else connected to the federal program. However, if your address, bank account, or marital status changes, you’ll want to update your information with the Social Security Administration (SSA). If you choose to withdraw your application, maybe to restart working, you can do so within 1 year.
Apart from these possibilities, the main thing retirees must do with retirement benefits is pay any taxes owed on benefits. Many retirees don’t even have to do that if their income isn’t high enough to pay federal taxes and they live in a state that doesn’t tax retirement benefits.
What should retirees on Social Security do on October 10?
Nevertheless, there is one more thing that all retirees should do when it comes to retirement benefits. And you should do it on October 10, just 9 days away from October 1, 2024.
The great news is that the task retirees need to complete on Oct. 10 is incredibly simple. You only have to go online. To be specific, go to the Social Security Administration website’s press releases section: https://www.ssa.gov/news/press/releases/
As you scroll down this web page, you’ll likely come across several links to news releases. Circle the date on your calendar: the morning of October 10, 2024. This is when a highly anticipated press release will reveal the Social Security cost-of-living adjustment (COLA) for 2025.
What to Expect from the Press Release
This important announcement will disclose the percentage increase in Social Security benefits starting January 2025. Additionally, it will likely provide details on the average dollar amount by which benefits will increase next year.
Additional Changes to Look Out For
Historically, these Social Security COLA announcements have also included information about other significant changes taking effect in the coming year. For instance, the press release for the 2024 COLA also mentioned an increase in the Social Security payroll tax maximum.
BLS and Social Security 2025 COLA
Curious about why October 10 is the chosen date? The reason lies with the Bureau of Labor Statistics (BLS). This agency releases its inflation numbers for September on this date. While BLS doesn’t always announce September inflation figures on October 10 each year, it typically releases this crucial data around the middle of each month.
The latest inflation numbers include the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This index plays a crucial role as it is used by Social Security to determine the annual Cost-of-Living Adjustment (COLA).
How is the Social Security COLA Calculated?
It’s not just the September CPI-W that matters. Social Security compares the average CPI-W for the third quarter of 2024 with the average for the third quarter of 2023. The percentage increase, rounded to the nearest tenth of 1%, will be declared as the official 2025 Social Security COLA.
What Will the 2025 Social Security COLA Likely Be?
While the exact amount of the SSA 2025 COLA will be announced in a few days, we can already get an idea of what to expect.
According to the CPI-W data from July and August, the nonprofit senior advocacy group, Senior Citizens League, predicts that the 2025 COLA will be around 2.5%. This projected increase would result in an average monthly benefit rise of approximately $48 for retirees.
A recent analysis shows that the upcoming 2.5% increase in retirement benefits is lower than the anticipated 3.2% Cost-of-Living Adjustment (COLA) for 2024, and significantly less than the 8.7% increase received last year. However, this increase is not too far off from the average benefits increase of around 2.6% over the past two decades.
Mark Your Calendar: Important Dates for Social Security Benefits
Make sure to check online on October 10 to find out the specific amount by which your SSA benefits will increase. If you miss this date, don’t worry—you’ll be informed soon enough. The Social Security Administration (SSA) typically starts notifying individuals about their new benefit amounts by mail starting in December.
