All about Social Security changes in 2 months

Social Security recipients have until the end of November to act before it’s too late and they end up compromising their monthly benefits. The Social Security program has many requirements and can be complicated, but there are certain dates retirees should mark on their calendars. The annual Cost of Living Adjustment (COLA) often occur in early to mid-October, and pensioners are aware that their monthly benefits will be paid on a Wednesday, depending on their birthday. All Social Security seniors should now make November 20 another occasion to remember as the year draws to a close.

Everything is about to change in Social Security in two months

After many months of waiting Social Security Administration has finally announced the new COLA increase for 2025. Benefits are increased annually to keep pace with inflation and maintain purchasing power. Retirees have had some nice benefit increases due to the recent rise in inflation. This year, inflation has finally slowed, hurting COLAs but slowing the rise in consumer prices, lowering the cost of living. According to the SSA, next year’s COLA will be 2.5%, the lowest in four years. In September, the average Social Security payout to retirees was about $1,921, or $23,052 a year. The average monthly benefit will increase to $1,969, or $23,628 annually, an increase of 2.5%.

Social Security recipients should consider creating an annual budget

Depending on when they started receiving benefits, how long they worked and how much they earned during their careers, each person will receive a different amount when the new benefit payments begin in January 2025. For retirees, Social security may constitute a significant part of their income. As of June 30 of this year, the SSA reports that about 90% of people over age 65 were receiving benefits that made up about 30% of their income. Keep in mind, however, that 12 percent of men and 15 percent of women receiving benefits rely on Social Security for 90 percent or more of their income, while 42 percent of women and 37 percent rely on monthly benefits for half or more of their income.

In addition, to begin budgeting, retirees may find it helpful to know how much they will receive in Social Security the following year. Therefore, all retirees should open their own social security accounts by November 20 at the latest. Beneficiaries can use the free account to manage their current benefits, project their future benefits, check their claim status, get Social Security replacement cards and receive 1099 tax forms. In addition, retirees can visit their accounts starting in early December to see their COLA notice and find out how much their benefits will increase the following year. However, retirees must set up their accounts by November 20 to receive the notification.

SSA will send a tax letter regarding the 2025 COLA increase

Many people want to avoid using the Internet whenever possible; therefore, one of these accounts is unnecessary. The SSA sends physical COLA notices throughout December. Financial budgetingon the other hand, can help you make smarter decisions, and knowing how much money you need to spend is an important aspect of budgeting. Therefore, it may be helpful to sign up for your My Social Security account by November 20 to start receiving future payments as soon as possible. Here are some suggestions that may be helpful to you if you decide to create a budget:

• Calculate your after-tax income to determine how much money you need.
• When estimating costs for accommodation, transport and food, be conservative. Things rarely go as planned.
• Try to set aside a little money each month for unforeseen needs.
• Track your progress to identify areas where you overspent and improve your predictions in the future.