The Social Security Administration made an important announcement on Oct. 10 that will affect every retiree receiving benefits.
The Social Security Administration (SSA) made an important announcement on Oct. 10, 2024. It will affect every retiree, as well as those receiving other Social Security benefits, such as Supplemental Security Income.
Here’s what the announcement is, along with some details on exactly how it will affect you.
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The Social Security Administration announced this important change
The Oct. 10 Social Security announcement related to the cost-of-living adjustment, or COLA.
COLAs are increases in benefits that occur most years. They are very important because prices increase over time. If retirees and other Social Security recipients just received the same benefit year after year, they’d be able to buy less and less as their income remained stable but the price of goods and services went up.
To make sure that doesn’t happen, a formula was put in place to calculate automatic benefit increases. Data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is assessed each year. If third-quarter CPI-W data shows that prices rose year over year on a basket of goods and services, then retirees get a COLA based on that increase.
This year’s CPI-W data did show prices are up, so the Social Security Administration announced that those receiving benefits would be getting a raise. Specifically, seniors and others who are collecting Social Security will get a 2.5% benefits increase.
Retirees can expect to see their check amount increase beginning in January. According to the SSA, the average increase that seniors will get is around $50 monthly.
How much extra money will come in your check?
The Social Security Administration will be sending out personalized notifications alerting you to how big your benefits increase will be. These notices will go out in December. This year’s COLA notification has simplified the language from prior years, so it will be easier for seniors to understand exactly how much more money they are going to get when the COLA goes into effect.
If you have created a mySocialSecurity account online prior to Nov. 20, you will also be able to log into your account to get your COLA notification online. This can be faster and easier than waiting for your mailed notification, according to the SSA.
If you don’t want to wait, you can get a pretty close estimate of how much your benefits will increase by multiplying your current check amount by 2.5%. This isn’t the exact method by which Social Security calculates your benefits increase, but it will show you within a few dollars how much more money you can expect.
You’ll need to find out how much the Medicare premium increases are for 2025, though, if you’re like the majority of people who have these premiums automatically withdrawn from their Social Security payments. The exact premium increase hasn’t been announced yet, but most experts believe costs are going up, so this will eat into the COLA.
Retirees and others receiving Social Security should take note of this important announcement, so they can start planning and preparing for their upcoming cost-of-living adjustment and begin adjusting their budgets accordingly.