By Daily Mail (U.S.) | Created at 2024-09-30 15:50:22 | Updated at 2024-09-30 23:42:56
7 hours ago
Social Security checks with the next annual uplift will arrive sooner than expected.
The Social Security Administration (SSA) raises the amount social security checks are worth every year to stop inflation eating away at their purchasing power.
This annual increase, known as the Cost of Living Adjustment (COLA), would usually show up in the first checks of the new year, on the first day of January 2025.
However, since January 1 is a holiday, those due to receive Supplemental Security Income check will in fact receive them on December 31 this year.
These checks will carry the 2025 COLA uplift, which is predicted to rise by 2.5 percent, according to Tododisca.
The first checks to carry the 2025 COLA uplift will actually arrive on 31 December 2024
This means the usual maximum payment for these checks, $943 for individuals and $1,415 for a couple, could rise to around $967 and $1450 respectively.
The COLA rise depends on inflation, meaning the increase varies from year to year.
The SSA uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to calculate its adjustment each year.
Although the official figure is yet to be released, CPI data suggests it will be close to 2.5 percent.
The official number for the coming year's increase will likely be released in the second week of October.
This will be a smaller increase than in 2024 because inflation has cooled considerable in recent months.
Around 68 million Americans receive some form of Social Security benefit every month.
Total payouts, including for retirement, disability and survivor benefits, now cost the government around $1.5 trillion a year.
The highest retirement payments are as much as $4,873, though the figure is likely to be lower for the majority of recipients.
In fact, the average monthly retirement check is $1,907, a figure that takes into account the 35 highest-earning years in a recipient's career and is adjusted for inflation.
'The maximum benefit depends on the age you retire. For example, if you retire at full retirement age in 2024, your maximum benefit would be $3,822,' the SSA states on its website.
Social Security payments now cost the government around $1.5 trillion a year
'However, if you retire at age 62 in 2024, your maximum benefit would be $2,710.
'If you retire at age 70 in 2024, your maximum benefit would be $4,873,' the site explains.
Despite the pending COLA increase Americans living in nines states will collect less Social Security from September due to a jump in taxes.
Beneficiaries that live in Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont or West Virginia may have to pay more.
The exact impact will depend on which state you live in and overall income.
It also emerged earlier this year that Social Security is expected to run short on funds by 2035.
The program relies on its trust funds to provide monthly benefit checks to around 70 million Americans.
But an aging population is pushing up the cost of the program as a smaller share of people are paying into it, and spending is outpacing income.
The latest annual report from the Social Security Board of Trustees found that the program will only be able to pay out full benefits for the next 11 years - which is one year later than previous estimates.
