The Social Security Cost-of-Living Adjustment (COLA) for 2025 is on its way,Will it be enough for retirees?

The third Social Security payment for September would be paid in six days, focusing on the third round of retirement beneficiaries. The round could reach as high as $4,873 among retirees who retired at 70 years and made much more money while working.

Overview of Social Security and its financing

Social Security was created through the auspices of the Social Security Act, signed into law by President Franklin D. Roosevelt in 1935.

The intention behind the program was to provide “financial protection to workers and their families during economic hardship or old age, supplemental income to the elderly and those not covered by work-related benefits, and contributory old-age pensions for workers.

Based on this, the SSA was established to oversee and administer these benefits.

Pay-rollover taxes to fund Social Security, which are both the obligation of employers and employees. Part of every worker’s earnings will be automatically deducted, contributing to Social Security; the employers will match each contribution.

But fears arise regarding future funding. As demographic forces, in the form of increased retirees and a smaller workforce, begin to affect the financial soundness of the trust fund, funding for Social Security will have a difficult year in the years ahead.

This is why analysts predict that unless Congress acts to change this, by 2034 the Social Security Administration will no longer be able to pay the full benefits to recipients. If nothing changes, future retirement benefits may be lowered.

Payment Schedule for September

Social Security payments usually get released monthly and tend to be released in three different waves. The wave usually depends on the date of the individual’s birth, though, for the most part.

For instance, for September, the first wave was usually paid out on September 11 to social security beneficiaries born between the 1st through to the 10th of any given month.

The third of the month payment would be on September 18th, for those born between the 11th and 20th of each month. The final payment of the month would be received by retirees who were born after the 21st of every month on the 25th of September.

Excepting a beneficiary who started getting benefits prior to May 1997, everyone receives their respective benefits on the 3rd of every month.

Eligibility criteria

Qualification for Social Security benefits occurs at the age of 62 years old.

The retiree may begin to draw on their Social Security funds at 62, but the amount they will get per month will be based on a number of factors such as at what age they choose to retire, how much they earned over their lifetime and how much that money has been contributed into Social Security through payroll taxes.

Maximizing Social Security Benefits

As we mentioned earlier, the actual amount of Social Security benefits received by a person varies significantly, depending on their date of retirement.

The way the SSA designed its benefits is that early retirement means lower monthly checks and further retirement leads to a larger monthly check.

In fact, an individual who retires at the minimum age of 62 could bring home as much as $2,710 per month, according to earnings and contributions.

But in the event an individual delays retirement until age 70, of course, the maximum monthly payment is $4,873.

That’s because payments would be different since the benefits are being calculated differently: if you delay retirement, the government credits each and every year of delay with higher payouts.

It also offers a calculator on its website where any retiree can find out how much money he or she is likely going to get when he or she retires.

This is a tool that takes into account past earnings and an expected retirement age for an estimation, tailored to the applicant’s circumstance.

FAQS

How much will the COLA be in 2025?

Increase in percentage for the 2025 COLA will be announced to the piblic in october 2024.speculating that it would be modestly up Not as high as those of 2023 and 2024,however.

How is COLA calculated?

The COLA is based on a comparison of the average change in the CPI-W between the third quarter of the previous year and in the same quarter of the current year. If this change is upward, then the Social Security benefits rise along with the increase.