Confirmed Announcement of Social Security Check for Retirees

The clock is still ticking and the time is getting closer for all beneficiaries to know how much their monthly Social Security check will increase. Less than two weeks remain until 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 concerns about the changes are growing Social Security Administration will come to us in 2025. We all know that the system is struggling to manage and pay its beneficiaries and one of the reasons for this is budget constraints. It is a fact that the Old Age, Survivors and Disability Insurance (OASDI) programs are based on a pyramid scheme, the viability of which depends heavily on the number and contributions of the “base”.

However, demographic trends across modern countries suggest that birth rates will not improve any time soon, putting greater strain on the system as fewer new Americans enter and pay the workforce Social Security Taxes. As a result, pressure on the SSA administrator to find new ways to generate the cash flow needed to support each Social Security check would lead to greater demands for a larger government budget as well as indirect pressures over the way current benefits are distributed over the course of the year time to be changed. To understand how this could happen, you first need to understand how the process works now. Please read on.

How is the Social Security check increase determined?

Each Social Security check is increased by a predetermined amount, called a COLA 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 process for calculating the COLA, which adjusts each Social Security check for the next year, also depends on another index, the CPI-W, or Consumer Price Index for Urban Wage Earners and Office 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 that receive at least 50% of their income from wages or salaries. The Bureau of Labor Statistics (BLS) prepares the CPI-W each month and for COLA purposes, the SSA averages the numbers for the third quarter of the year (July, August and September) and compares them to the same numbers from the previous year. This difference represents the COLA for the following year.

This year, the BSL announced that the CPI-W will be available on October 10th. Therefore, you can expect the new COLA value to be announced in the second or third week of October, which will result in a change for everyone Social Security checks in January 2025. Keep in mind that other assets managed by the SSA will also be affected by the COLA increase, such as: 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 others.

What is the projected Social Security check increase for this year?

According to the Senior League (TSCL)In 2024, the COLA is expected to be around 2.5%, well below the 3.2% introduced in 2024. This reflects the assumption of lower inflation for the US economy as a whole. Taking that number into account, the typical Social Security check could increase by $48 per month, for a total of $1,968. Although this seems low, it is within the 20-year average of the index and has significant implications for every Social Security recipient: their purchasing power will be less affected than in recent years, and the compounding effect of inflation will be less severe next year.