Social Security Announces 2.5% COLA in 2025

Social Security beneficiaries will see a 2.5% increase in their benefit payments in 2025, according to the Social Security Administration.

The annual cost of living (COLA) adjustment will affect more than 72.5 million Social Security and Supplemental Security Income (SSI) beneficiaries. This year, Social Security beneficiaries will get a new one-page COLA summary that will detail the new benefits and the exact date the 2025 adjustment will start.

Just how much of an increase will depend on the size of the Medicare Part B premium, which is projected to increase to $184 a month in 2025, up from $174.70. Typically, Medicare Part B payments are deducted from Social Security benefits in advance.

Social Security plays an important role in retirement. In fact, the 2024 Employee Benefit Research Institute report found that three out of five retired Americans say Social Security is a major source of income in their retirement. While it’s been known for months that the 2025 increase would be smaller than the 2023 and 2022 increases, the final number may impact your overall financial picture.

If that’s the case, please let us know as soon as possible. Your retirement income needs may change over time, so let’s not miss an opportunity to make any small adjustments needed to make you feel a little more comfortable as the calendar turns to 2025. If nobody is helping you plan for retirement or factor these adjustments in to your plan, we would be happy to help.

Sources:

CNBC.com, October 10, 2024; ThinkAdvisor.com, October 10, 2024

Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this content, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for you or your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Searcy Financial Services, Inc.

The content of this letter does not constitute a tax or legal opinion. Always consult with a competent professional service provider for advice on tax or legal matters specific to your situation. To the extent that a reader has any questions regarding the applicability of any specific issue discussed in this content, he/she is encouraged to consult with the professional advisor of his/her choosing.  

Published for the blog on November 6, 2024 by Searcy Financial Services, your Overland Park, Kansas Fee-Only Financial Planner and Investment Manager.