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Confirmed announcement of Social Security check for retirees

Confirmed announcement of Social Security check for retirees

Vaseline 1 month ago

The clock is still ticking and the time is fast approaching, so all beneficiaries can know how much their monthly Social Security check will increase. There are less than two weeks to go before the final piece of the puzzle to calculate the percentage that will affect all Social Security programs. You’ve probably heard in the news that there is growing concern about the changes coming to the Social Security Administration that we will face in 2025. We all know that the system has struggled to manage and pay its beneficiaries, and one of the reasons for this is budgetary constraints. The fact is that the Old Age, Survivors, and Disability Insurance (OASDI) programs are based on a pyramid-like system that relies heavily on the number and contributions of the “base” to function.

However, demographic trends in all modern countries indicate that birth rates will not improve any time soon, putting even more pressure on the system as fewer new Americans enter the workforce and pay salaries. Social Security Taxes. As a result, the pressure on the SSA administrator to find new ways to generate the cash flow needed to support any Social Security check would result in an increased demand for a larger government budget, as well as indirect pressure on the how current benefits are adjusted over time. . To understand how this could happen, you first need to understand how the process works now. Please read on for that.

How is the Social Security check increase determined?

Each Social Security check is increased by a predetermined amount known as the COLA, or cost of living adjustment. As the name suggests, this is the ratio used to determine increases in payments and other values ​​administered by the Social Security Administration. The procedure for calculating the COLA, which adjusts each Social Security check for the following year, also depends on another index, the CPI-W, or consumer price index for urban wage earners and white-collar workers.

Essentially, the CPI-W is a collection of goods and services that are tracked to see how their prices change over time. These values ​​are then weighted based on the spending preferences and priorities of families who earn at least 50% of their income from wages or salaries. The Bureau of Labor Statistics (BLS) produces the CPI-W each month and for COLA purposes, the SSA averages the figures for the third quarter of the year (July, August and September) and compares them to the same figures from the previous year. This difference represents the COLA for the following year.

This year the BSL has announced that the CPI-W will be available on October 10th. As a result, you can expect the new COLA value to be announced in the second or third week of October, which will result in a change in all Social Security checks in January 2025. Please note that other values ​​administered by the SSA will also be affected by the COLA increase, such as the monthly income and asset limits for Supplemental Security Income, the maximum Social Security benefit at full retirement age (FRA), and the SSI student exclusion amount, among other things.

What is the estimated Social Security Check increase for this year?

According to the Senior Competition (TSCL)COLA is expected to be around 2.5% next year, significantly lower than the 3.2% introduced in 2024. This reflects the assumption of lower inflation for the US economy as a whole. With this figure in mind, the typical Social Security check could increase by $48 per month to a total of $1,968. Although this may seem low, it is within the 20-year average of the index and has major implications for every social security recipient: their purchasing power will be less affected than in recent years, and the compound effect of inflation will continue to increase in the coming years be less serious. year.