For those receiving Social Security benefits, the 2025 cost-of-living adjustment (COLA) could be nearly a percentage point lower than this year’s rate. According to an Aug. 14 statement, the Senior Citizens League has revised its previous prediction of a 2.63% increase down to a new figure of 2.57%.
The 2024 COLA was set at 3.2%. If the new prediction holds true, it would disrupt what some experts described as a “historic” COLA forecast. However, it’s important to note that “historic” doesn’t necessarily mean the adjustment will significantly alleviate the financial strain for seniors living paycheck-to-paycheck.
Change in COLAs trend
Some Social Security COLA experts suggest that forecasts show Social Security’s 2025 COLA will bring about a change that hasn’t been seen in nearly 3 decades. For your information, the COLA figure would surpass a minimum of 2.6% for the fourth consecutive year in a row.
The Rise of COLA Over the Years
In 2022, the rate was an impressive 5.9%. By 2023, the Cost-of-Living Adjustment (COLA) increased to a staggering 8.7%. This year, the figure settled at 3.2%, continuing the trend of noteworthy increases.
Understanding Social Security Payments
For those who may not know, you can technically start taking out Social Security funds when you turn 62. So, if you were born in 1962, this year marks your eligibility for initial payments.
Important Considerations Before Claiming Early
Before you pick up the phone, though, keep in mind that taking the money early will lower your overall monthly Social Security income. It’s crucial to weigh the pros and cons before making this decision.
Average Social Security Check
According to SSA, a typical Social Security check averages about $918 per month as of July 2024. Depending on the age you file, your check may be lower or higher. Of course, not everyone has the financial flexibility to wait until they are 70 to file and get a 24% extra.
If you’re willing to wait a bit longer, you can significantly increase your annual Social Security benefits.
Maximizing Your Social Security Benefits
At age 68, you can receive an 8% increase over the average amount, bringing your total to $1,924.60 per month, according to recent reports.
Boosting Your Income at Age 69
If you choose to delay until you’re 69, you can enjoy an additional 8% increase, resulting in a total monthly income of $2,067.12. This figure exceeds the average by a remarkable 16%.
The Ultimate Benefit at Age 70 and Beyond
At age 70 and older, the increase caps at 24% above the average monthly amount, providing you with a substantial total of $2,209.68 per month.