Social Security Changes – And your Retirement Income Check

As our client’s approach retirement, a major consideration is when do I take Social Security and how might that help secure my income needs into retirement. 

In future retirement planning one of the greatest risks we face is inflation and the risk of our retirement income not keeping pace with the increase of goods and services over time. 

As inflation continues to be a concern we have seen a considerable adjustment to social security benefits paid which can help reduce that risk. 

Here is the good news regarding Social Security checks starting next year.

In October the Social Security Administration announced a 2.5% benefit increase for 2025 for social security recipients. 

Per the Social Security ACT this cost of living adjustment (COLA) is tied directly to the Consumer Price Index (CPI). Without getting into too many specifics the CPI is a broad measure of the change in prices for various goods and services across the US.

So essentially prices were estimated to have an increase of 2.5% from the previous year and this adjustment helps offset the overall rise in cost of living expenses.

For comparison the COLA adjustment in 2024 was 3.2% and in 2023 was 8.7%. Historically the average COLA adjustment has been 2.6%.

The reason for the lower adjustment for 2025 from previous years is directly related to the efforts of the Federal Reserve to curb inflation. As the data shows the COLA for 2024 is more in line with the historical average.

If anyone wants to view their COLA notice online they can visit the Social Security website www.ssa.gov/myaccount.