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Why next year's Social Security checks could be the most generous yet
Social Security recipients are set to receive an extra $60 a month next year to help with the soaring cost of living, new estimates suggest.
The benefits, handed out to 71 million Americans, rise each year in-line with inflation which has remained stubbornly sticky.
Policy analyst Mary Johnson estimated the rise for 2025 would be around 3.2 percent based on recent inflation data.
It would mean the average retirement benefit of $1,907 per month would be bolstered by an extra $61 to $1,968.
Recipients already benefited from a 3.2 percent increase to their payments between 2023 and 2024. The year prior, they received a record-setting bump of 8.7 percent, pushed up by rampant inflation.
Recipients already benefited from a 3.2 percent increase to their payments between 2023 and 2024
Social Security recipients are set to receive an extra $60 a month next year to help with the soaring cost of living , new estimates suggest. Pictured: Martin O'Malley, Commissioner of Social Security
The annual increase, known as the 'cost-of-living adjustment' (COLA), has risen by 2.6 percent each year on average for the past 20 years.
COLA is based on the change to the Consumer Price Index (CPI). Figures released yesterday show the rate of annual inflation ease slightly to 3.4 percent in April, down from 3.5 percent in March.
However, it remains well above 2 percent - the target set by the Federal Reserve before it starts cutting interest rates.
Johnson said: 'The higher inflation indicates that consumers are still experiencing an erosion in buying power.'
Retirees and their dependents make up three-quarters of all Social Security recipients but millions of other beneficiaries including disabled workers and low-income people will also receive the increase.
The payments are considered a lifeline to lower and middle-income retirees, many of whom have never had workplace retirement accounts like a 401(k).
Experts warned that projected increase to Medicare Part B premiums could eat into the raise considerably.
In an annual report, Medicare Trustees estimate the standard monthly Part B premium could rise 5.9 percent, from $174.70 to $185.
Part B premiums are automatically deducted from Social Security checks and are one of the fastest-growing costs in retirement, Johnson said.
The benefits, handed out to 71 million Americans, rise each year in-line with inflation which has remained stubbornly sticky
Figures released yesterday show the rate of annual inflation ease slightly to 3.4 percent in April, down from 3.5 percent in March
It comes after a new report warned the Social Security Administration (SSA) could run short on funds by 2035.
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.
While Martin O'Malley, Commissioner of Social Security, said this was 'good news' for beneficiaries, he urged Congress to take steps to 'extend the financial health of the Trust Fund into the foreseeable future.'