Social Security benefits have long served as a critical financial support for over 71 million Americans, including retirees, veterans, and their dependents. The Cost-of-Living Adjustment (COLA) was created in 1973 and has been implemented yearly since 1975 to assist these payments keep up with inflation. The buying power of Social Security benefits has been protected against growing expenses thanks in large part to this modification.
The COLA rise was set at 3.2% in 2024, giving beneficiaries' monthly payouts a little raise. The purpose of this change was to assist recipients in managing the growing cost of living, especially in light of the recent challenges from inflation. Concerns have been raised, though, about whether this rise will be sufficient to preserve buying power, particularly for people with fixed incomes.
Early projections for 2025 indicated a 2.57% rise in the COLA. If verified, this would result in an extra $50 per month on average for Social Security beneficiaries. Although there would be some comfort from this modification, experts are worried that it could not be sufficient to fulfill the financial demands of retirees.
In order to retain the same level of spending power as they did in 2010, seniors may need to contribute an extra $370 per month, according to the Seniors League's 2024 Loss of Buying Power research. This study brought to light the increasing financial difficulties that elderly Americans are facing, especially in light of increased living expenses.
Retirees' finances may also be further strained by the anticipated increase in Medicare Part B premiums. These rates, which pay for medical treatments and outpatient care, have been rising gradually and frequently faster than COLA changes. For many seniors, then, the net benefit increase may be somewhat less when Medicare premiums are subtracted from Social Security benefits.
The number of years worked, the total amount of taxes paid, and the retirement age all affect how much Social Security pays out. As of 2024, the average monthly payments for different categories of beneficiaries were as follows:
- Retired workers received about $1,907 per month.
- Retired couples, filing jointly, received around $3,303 per month.
- Survivor benefits averaged $1,509.50 per month.
- Spouses of retired workers received an average of $910 per month.
- Children of retired workers received an average of $892.39 per month.
- Supplemental Security Income (SSI) beneficiaries, who are individuals, received an average of $943 per month.
- SSI beneficiary couples received an average of $1,415 per month.
These numbers show how different Social Security claimants are from one another and how different the assistance they receive depends on their unique situation. Though beneficial, the COLA increases have drawn criticism for not going far enough in meeting retirees' and other recipients' financial demands.