Big increase in the average check for retirees starting January 1 – SSA makes it official

By Allen

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Big increase in the average check for retirees starting January 1 – SSA makes it official

Most retirees are aware that their Social Security benefits include an automatic cost-of-living adjustment (COLA) each year. COLAs are designed to help them keep up with inflation and maintain purchasing power, but they are not intended to increase benefits.

This is one of the primary reasons that experts advise beneficiaries not to rely solely on benefits to meet their retirement needs. Benefits were never expected to replace a salary, but rather to cover approximately 40% of expenses.

Despite this, many retirees rely on their Social Security checks to make ends meet, and with this year’s 2.5% increase, many are unsure how they will make ends meet in the new year.

The impact of a low COLA on retirees Social Security benefits

For those who rely on some form of Social Security, the increase helps with expenses like Medicare. When we look at the average monthly Social Security benefit in 2024 and add the 2.5% COLA, we get from $1,927 to $1,976 in 2025.

This is only a $49 increase, which, when combined with the previously announced Medicare Part B increase (the standard monthly premium for Part B is $174.70, but it will rise to $185 in 2025), leaves beneficiaries with only $39 extra per month to cover expenses.

This does not imply that every beneficiary will receive an equal increase; those with higher checks will receive more, while those with lower benefits will receive less. Some beneficiaries are not even eligible for Medicare, so this scenario does not apply to them, because Social Security eligibility begins at age 62, whereas Medicare eligibility does not begin until age 65.

Regardless of the increase and the services you have signed up for, the 2.5% increase will be insufficient for most people to cover the increase in expenses they experienced in 2024, when inflation surpassed the COLA in the first half of the year, let alone make up for some of the savings they used to cover the difference in their expected expenses.

Big increase in the average check for retirees starting January 1 – SSA makes it official
Source (Google.com)

How to make up for a minimal increase

When you’re a regular worker, it’s easy to say, “Just get a higher salary or a different job that pays better, or just move,” but as you get older, things can become more complicated. The principles remain unchanged, and while making some lifestyle changes can be difficult, the improved financial situation may be worth the sacrifice.

Because benefits are based on your record rather than your address, moving to a less expensive part of the country is the most effective way to increase your disposable income with minimal effort.

It can be difficult to leave friends and family behind, but the sooner you establish yourself, the better, as you can build a support network on which to rely if necessary. This has the added benefit of providing you with additional income from the sale of a house in a higher cost of living area, as well as passive income from rental.

In fact, you can sell and downsize or rent out your home even if you live in the same city. It may be tempting to keep the house, but consider how much of your income will be spent on it and whether there are other options available that would better suit your lifestyle. Furthermore, a smaller home is easier to clean, heat, and cool.

As a last resort, if you are fit enough, consider returning to work with part-time jobs that offer flexibility. It doesn’t have to be a high-pressure job or even in your field, but it would provide extra income and some contact with other people, which could help you avoid isolation.

Read Also :- Social Security notifications change this week – Retirees should do this now with their accounts


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