Everything about Social Security Changes in 2 Months – Retirees Should Act Before the End of November

As we approach the end of the year, Social Security beneficiaries have a critical date to keep in mind: November 20th. This deadline holds particular significance, especially in light of the recently announced 2.5% cost-of-living adjustment (COLA) for 2025. For retirees, November serves as a key time to secure optimal benefits for the coming year by creating or updating their My Social Security accounts. Staying informed and organized with Social Security requirements can help retirees manage monthly income, budgeting, and the effects of annual adjustments. Here’s what you need to know to make the most of these updates.

Key Dates for Social Security Beneficiaries

Social Security schedules are based on specific dates, such as when the COLA announcement is made and the Wednesdays when monthly benefits are typically paid, based on a recipient’s birth date. The recently announced COLA will raise the average monthly benefit by 2.5% for 2025, but beneficiaries must act by November 20, 2024, to access full benefits. Missing this deadline could delay beneficiaries’ ability to view or manage these adjustments online, affecting planning and budgeting decisions for the upcoming year.

The 2025 COLA Adjustment

The Social Security Administration (SSA) recently revealed a 2.5% COLA increase, the lowest in four years due to slowed inflation. This adjustment aims to align Social Security benefits with inflation, helping maintain retirees’ purchasing power despite economic changes. In September 2024, the average Social Security payment was $1,921 per month. The 2.5% increase means the average benefit will rise to approximately $1,969 per month, translating to $23,628 annually.

While this increase is modest compared to previous years, it is still a valuable adjustment that reflects the current economy. Retirees should mark their calendars for early December, when the SSA will update the COLA figures in My Social Security accounts, allowing beneficiaries to see their exact monthly payment amounts for 2025.

Creating an Annual Budget Based on Social Security Benefits

Given that Social Security constitutes about 30% of income for nearly 90% of Americans over 65, careful budgeting is essential to make the most of these benefits. For some recipients, Social Security is a primary income source, with 12% of men and 15% of women relying on it for 90% or more of their income. This reliance makes budgeting a powerful tool for retirees to manage their finances, considering potential increases or economic shifts.

Budgeting Tips for Social Security Recipients:

1. Calculate After-Tax Income
   Understanding your after-tax Social Security income helps establish an accurate starting point for budgeting. This figure represents what you can actually spend each month and can be found in your My Social Security account.
2. Estimate Core Expenses
   Prioritize essential expenses like housing, transportation, and food. Taking a conservative approach to these estimates provides a buffer for unexpected costs.
3. Build an Emergency Fund
   Even a small monthly contribution can help cover sudden expenses, reducing financial strain in the future.
4. Track Spending
   Regularly reviewing expenses helps identify patterns, allowing for adjustments if you find you’re overspending in certain areas.

For retirees uncertain about how much their monthly benefits will increase, the SSA’s December update will allow a clearer view of available funds for 2025, simplifying the annual budget planning process.

Setting Up Your My Social Security Account by November 20th

Creating a My Social Security account by November 20, 2024, is crucial for timely access to your 2025 benefits information. This free online portal offers beneficiaries an easy way to manage benefits, view payment history, and access 1099 tax forms. Here’s what you need to do:

1. Sign Up for My Social Security
   If you haven’t created an account, visit the SSA’s official website. This account enables you to view your future benefit increases and manage essential details.
2. Review Your Benefits
   Starting in early December, log in to view your updated benefits, reflecting the 2.5% COLA increase. This information helps in adjusting your budget for the new year.
3. Access Physical Notices
   For those who prefer paper documentation, the SSA will send physical notices about the COLA throughout December. However, having a My Social Security account gives you the added convenience of digital access.

Staying Ahead in a Changing Social Security Landscape

The SSA’s annual COLA announcements and changes to Social Security programs highlight the importance of timely planning. By setting up or maintaining your My Social Security account by November 20, beneficiaries can stay updated on benefits changes and better manage their finances. As Social Security benefits continue to evolve with inflation and other factors, tracking these changes can enhance financial stability.