Today, the Social Security Administration released their cost of living adjustment (COLA) for 2025, an increase of 2.5%. While this number is essential for those receiving benefits, it can be helpful to you regardless of your benefit status. Read on for more details.
If you are currently receiving Social Security benefits:
- You’ll soon receive an updated benefit letter from the Social Security Administration.
- The letter will detail your 2025 monthly benefit amounts as well as any updated Medicare deductions.
- You can use your benefit letter as proof of income when applying for loans. Or, if you’re applying for assistance programs, such as those for food, rent, or energy, you’ll most likely need a copy of your letter.
- Access your personal my Social Security account to review or update direct deposit information, access tax forms, or find out when your next benefit payment occurs.
If you are planning to retire soon:
- Knowing the COLA will help you plan your future benefits. Access your personal my Social Security account and review your salary history and contact information.
- Visit the Social Security Plan for Retirement webpage. Here, you’ll find details of factors that may impact your benefit, such as taxes, Medicare, spousal benefits, and work continuation, with the necessary links or forms.
- If you’re ready, start your application. Review the checklist and begin the application process right from the Social Security website.
If you aren’t anticipating benefits anytime soon:
- Access your personal my Social Security account to double-check your eligibility and earnings. It’s easier to fix now when the information is still fresh and recent tax returns aren’t buried in your filing cabinet.
- Run your retirement projections. See your Full Retirement Age and estimated monthly benefit amount at that time, or earlier or later dates. Seeing an estimated monthly amount to compare to your current salary can help you estimate if you are going to have a surplus or shortage when it comes to retirement. And supplementing that benefit by saving for retirement now will help in the long run.
For all ages, the annual COLA is helpful in so many ways:
- Keep your my Social Security account up to date. If you read the various age suggestions, you’ll see that I’ve referenced this site in each area. Regardless of your age, if you are working, you should be reviewing this site each year to ensure contact information is accurate and to review estimated benefits. The login procedures have recently changed, so if you haven’t done so yet, be sure to sign in using login.gov. Additional information about this change was communicated in a BPAS University Quick Take earlier this year, you can view it here.
- Use it to run retirement projections. Did you know that when you log into your BPAS account, there’s a Mile Marker to estimate your retirement surplus or shortfall? While the Mile Marker provides an estimate of your current account balance, you can further customize it with outside assets, including Social Security benefits. For a realistic analysis, providing your updated benefit amount is helpful!
- Want more? We have a page at BPAS University about Social Security & Medicare. Watch the videos, take a quiz, and learn more about these benefits!
- Stay tuned! The IRS releases the annual contribution limits for retirement accounts shortly after Social Security’s announcement. If you’re planning to max out, or even just increase your retirement savings, this information is helpful to have!