You’ll beat Social Security’s average cost of living adjustment (COLA) increase by $49 for 2025 if your checks are larger

The Social Security Cost of Living Adjustment (COLA) is always big news for retirees who rely on these benefits, and that’s especially the case this year. According to The Senior Citizens League (TSCL), about four in five senior households say their monthly expenses have increased in the past 12 months, and more than three in five of these households are worried about how they will cover their expenses in the future. a non-partisan senior group.

Anyone hoping for a little help from COLA 2025 may be disappointed. It was just 2.5%, the smallest increase since 2021. This increases the average monthly benefit from $1,927 to $1,976 – an increase of $49.

However, some people will get significantly more. And you don’t have to wait until the Social Security Administration sends out your personalized COLA notice in December to find out if you’re eligible.

Everyone gets a slightly different COLA

Social Security COLAs attempt to counteract inflation, and they are based on the increase in average third-quarter inflation data from one year to the next. The government determines this by looking at the Consumer Price Index for Urban Wage Earners and Office Workers (CPI-W) for July, August and September of the current year and the previous year.

The 2024 average was 2.5% higher than the 2023 average, and so the Social Security Administration arrived at a COLA of 2.5% for next year. Because COLA is a percentage, everyone will experience slightly different dollar value increases in 2025.

If your checks today are above the average amount of $1,927, you can be sure that your checks will be credited for more than $49 next year. On the other hand, if you currently receive less than today’s average, you will see a smaller increase in 2025.

Here’s how to figure out how much more you’ll get in 2025

Determining your 2025 benefits isn’t as difficult as you might think. The actual calculation is somewhat complex and involves several steps. However, you can get a good approximation by simply adding 2.5% to your current checks.

For example, if you receive $2,200 per month from Social Security today, you will receive 2.5%, or $55 more, in 2025, bringing your new benefit to $2,255. This technique works for all types of benefits, including retirement, spousal, and disability benefits. Your answer might be off by a dollar or two, but it should be pretty close.

The Social Security Administration will also send you a personalized COLA notice in December detailing your 2025 benefits. Anyone who has a My Social Security account can also access this message via the Message Center in early December.

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When your new checks will arrive

The Social Security Administration will first add the 2025 COLA to your December 2024 checks. However, since the benefits are not paid out until the month after they are due, you will receive the first checks with your new benefit amount in January.

The exact date depends on the day of the month you were born, as follows:

• Born 1st to 10th: January 8, 2025

• Born on the 11th to the 20th: January 15, 2025

• Born 21st to 31st: January 22, 2025

You will continue to receive your benefits on either the second, third or fourth Wednesday of each month.

If you have questions about your 2025 Social Security benefit, your best bet is to contact the Social Security Administration for personalized advice. However, you may want to wait until you receive your COLA notice in the mail as this may clarify some things for you.

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You’ll beat the average Social Security cost of living adjustment (COLA) increase for 2025 by $49 if your checks are larger. This was originally published by The Motley Fool