The Social Security Administration (SSA) is set to announce the 2025 cost-of-living adjustment (COLA) in October, with a projected increase of 2.5%. This adjustment helps protect the buying power of Social Security benefits by accounting for inflation. Although the 2.5% increase is smaller than the previous four years, it remains vital for retirees managing rising costs.
Retirees aged 70 will see the largest nominal-dollar benefit increases due to their higher baseline payments. For example, the average 70-year-old retiree currently receives around $2,068 per month, and with the expected 2.5% COLA, they will gain an additional $51.70 per month.
Meanwhile, retirees with lower benefits will receive smaller increases, as the adjustment is based on a percentage of their current payout.
Delaying Social Security until age 70 allows retirees to accumulate delayed retirement credits, increasing benefits by about 8% annually beyond full retirement age. Once they reach 70, the benefits are no longer tied to work earnings but adjusted by inflation alone.
Read More News:
- Social Security Retirement Age to Change: What to Expect
- Social Security Modernization: Digital Signatures and Online SSI Applications
For more details on how COLA impacts retirees, visit Nasdaq.