- Social Security recipients could qualify for a $60 per month increase
- Benefits increase every year in line with inflation, which remained stable in 2024
- Analysts estimate that payments will increase by 3.2 percent in 2025
Social Security recipients will receive an extra $60 a month next year to help with the rising cost of living, new estimates suggest.
Benefits, provided to 71 million Americans, rise every year in line with inflation, which has remained stubbornly persistent.
Policy analyst Mary Johnson estimated, based on recent inflation data, that the increase for 2025 would be about 3.2 percent.
It would mean the average pension benefit of $1,907 per month would be boosted by an additional $61 to $1,968.
Recipients already benefited from a 3.2 percent increase in their payments between 2023 and 2024. The year before, they received a record 8.7 percent increase, driven up by rampant inflation.
Recipients already benefited from a 3.2 percent increase in their payments between 2023 and 2024
Social Security recipients will receive an extra $60 a month next year to help with the rising cost of living, new estimates suggest. Pictured: Social Security Commissioner Martin O’Malley
The annual increase, known as the “cost of living” (COLA), has risen an average of 2.6 percent per year over the past two decades.
COLA is based on the change in the consumer price index (CPI). Figures released yesterday show annual inflation eased slightly to 3.4 percent in April, compared to 3.5 percent in March.
However, interest rates remain well above 2 percent, the target set by the Federal Reserve before lowering interest rates.
Johnson said: ‘Higher inflation indicates consumers are continuing to experience an erosion of purchasing 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 earners, will also receive the increase.
The payments are considered a lifeline for lower- and middle-income retirees, many of whom have never had a workplace retirement account like a 401(k).
Experts warned that the expected increase in Medicare Part B premiums could significantly eat up the increase.
In an annual report, Medicare Trustees estimated that the standard monthly Part B premium could increase 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 expenses in retirement, Johnson said.
Benefits, provided to 71 million Americans, are rising every year in line with inflation, which has remained stubbornly persistent
Figures released yesterday show annual inflation eased slightly to 3.4 percent in April, compared to 3.5 percent in March
It comes after a new report warned that the Social Security Administration (SSA) could be short of resources by 2035.
The latest annual report from the Social Security Board of Trustees shows that the program will only be able to pay out full benefits for the next 11 years — which is a year later than previous estimates.
While Social Security Commissioner Martin O’Malley said this was “good news” for beneficiaries, he urged Congress to take steps to “extend the financial health of the trust fund for the foreseeable future.”