Social Security Retirees Should Be Paying Attention to 1 Number in 2025

With another year in the books, Social Security retirees will look ahead to 2025. Retirees will receive a 2.5% cost-of-living adjustment (COLA), the smallest in four years because inflation declined this year. The average Social Security benefit for retired workers in November was roughly $1,925 per month, or $23,105 annually. The COLA increase will lift the average monthly benefit to roughly $1,974, or $23,683 annually. Now that retirees know their benefits for 2025, they can map out their budgets for the upcoming year and start thinking about future benefits. Here's the one number Social Security retirees should pay attention to in 2025.2026 may seem far away, but the next year's benefits are always determined the year before, specifically in the third quarter during July, August, and September. Social Security COLAs are intended to help retirees keep pace with inflation, so the Social Security Administration (SSA) uses inflation data from those three months to determine the following year's COLA.The Consumer Price Index, which tracks the price changes on a basket of consumer goods and services, is the mainstream inflation gauge. However, the market focuses on the Consumer Price Index for All Urban Consumers (CPI-U), while the SSA uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to calculate the COLA. Some argue that the CPI-W doesn't fully capture the spending habits of the mainly older population that claims benefits, but the SSA by law must use the CPI-W when calculating the new COLA. The CPI-U and CPI-W largely move in the same direction.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool