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Yahoo
an hour ago
- Business
- Yahoo
Here's What the Average Social Security Payment Will Be This Summer
The average monthly Social Security benefit for retired workers topped $2,000 for the first time in the agency's nine-decade history. Find Out: Read Next: While Social Security remains a vital income stream for millions of Americans, inflation, cost-of-living adjustments and rising healthcare costs could erode the purchasing power for older adults who rely on Social Security alone. Here's what beneficiaries need to know about their payments this season to make the most out of every dollar. According to the latest data from the Social Security Administration, as of summer 2025, the average monthly Social Security benefit for retired workers is $2,002.39. This marks an increase from roughly $1,917 a year ago, reflecting the 2.5% cost-of-living adjustment (COLA) that took effect in January. 'While those numbers may not seem like a huge jump, every dollar counts when you're on a fixed income,' said Oscar Skjaerpe, certified financial planner (CFP) at ProVise Management Group. 'It's a reminder that even modest COLAs can add up over time, but they still need to be part of a bigger plan.' Be Aware: Cost-of-living adjustments (COLAs) are designed to help Social Security payments keep pace with inflation. While the 2025 COLA of 2.5% has kept pace with average inflation so far, retirement experts said it still falls short of covering rising expenses, such as healthcare and insurance. 'The average COLA for Social Security over the last 30 years was about 3.2%.,' said Krisstin Petersmarck, National Social Security Advisor (NSSA) and investment advisor representative at New Horizon Retirement Solutions. Petersmarck said that while COLA is designed to help benefits keep pace with inflation, other factors, like rising Medicare Part B premiums, may strain household budgets. 'In 2025, the COLA increase was 2.5% and the average inflation rate so far is between 2.4% and 2.8%,' Petersmarck said. 'So, the COLA increase based on stats has been keeping pace. However, the opinion of most people receiving Social Security benefits is that it is not keeping pace.' Even with the 2.5% COLA increase, factors like Medicare premiums, taxes and income brackets can reduce the actual amount retirees receive. 'The main driver of this year's benefit increase is the 2.5% COLA,' said Jim Davis, CFP and senior wealth advisor with Aspen Wealth Management. 'But rising Medicare Part B premiums and potential tax implications can quickly erode those gains.' Most retirees have their Medicare Part B premiums automatically deducted from their monthly Social Security payments. When these premiums increase, as they often do year over year, they can offset any cost-of-living adjustment and shrink the net amount that actually lands in a retiree's bank account. 'For high-net-worth retirees, a larger portion of Social Security benefits may be taxable and higher Medicare premiums (IRMAA surcharges) can further reduce net payments,' Davis said. 'It's a reminder that even 'guaranteed' income streams come with moving parts, especially for those with more complex financial pictures.' While the average Social Security benefit for retired workers has risen to just over $2,000 a month in 2025, many retirees could find that it doesn't stretch as far as expected. 'Social Security was designed to be a safety net, not a hammock. Many retirees think they can count on it as their primary income source when it's really meant to support and not represent the majority of a broader retirement income plan,' said Shane O'Hara, CFP and certified private wealth advisor (CPWA) at ProVise Management Group. 'With inflation still higher than the Fed's goal of 2% annually and Medicare premiums often increasing faster than the cost-of-living adjustments (COLAs), retirees should be cautious about assuming their Social Security benefit will stretch as far as it did for their parents,' O'Hara added. Experts recommended viewing Social Security as a stable foundation, not the whole strategy. 'In the world of hiking and dressing properly to reach the mountain's summit, you can think of Social Security like your base layer: dependable, but not the whole outfit,' O'Hara explained. 'You need to layer on income from savings, investments and potentially a pension to weather the rising cost of living, unexpected expenses or even a surprise travel opportunity because retirement should include some fun too.' More From GOBankingRates 25 Places To Buy a Home If You Want It To Gain Value This article originally appeared on Here's What the Average Social Security Payment Will Be This Summer Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Newsweek
12 hours ago
- Business
- Newsweek
Social Security Changes Direction After Mass Removals
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The number of people collecting Social Security disability benefits has plateaued after a large drop off last year. Why It Matters Supplemental Security Income (SSI) benefits are issued to blind, disabled and older Americans with little to no-income or resources. Some 7.4 million collect these benefits as of May 2025. Newsweek has contacted the Social Security Administration for comment via email outside of regular working hours. What To Know Between May 2023 and 2024, the number of people claiming these benefits dropped by more than 100,000 in the space of year. Between February and May 2025, the number of people receiving SSI benefits remained relatively stable, with only slight month-to-month fluctuations. In February, 7,283,533 individuals collected SSI. This figure rose modestly in March to 7,284,527, before increasing again in April to 7,294,562—the highest monthly total in this period. However, in May, the number of recipients dipped slightly to 7,281,384. There are several reasons someone's SSI payments may stop. "Exit from the SSI program can be due to death, medical recovery, excess income (earned or unearned), excess resources, or a change in living arrangements," the SSA said in a report on disability benefit trends. "Payments may be suspended because the recipient has excess earnings, excess unearned income, excess resources, or a change in living arrangements." File photo: Social Security Administration branch sign is seen from outside. File photo: Social Security Administration branch sign is seen from outside. GETTY Which States Have the Most SSI Recipients? Since last year, the state with the largest number of SSI recipients remains California, where just shy of 1 million—987,881—beneficiaries live. In second is Texas, with some 422,000 claimants; then New York, with 418,000. On the other end, Wyoming has the smallest number of people claiming SSI benefits, with just 4,900 claimants. North Dakota and Alaska have similarly small amounts of payees—5,790 and 7,506 respectively. Increased SSI for 2026? The cost-of-living adjustment (COLA), implemented in 1975, is a fundamental component of Social Security, which helps preserve the purchasing power of benefits by keeping pace with inflation. Looking ahead to 2026, independent estimates from Social Security policy analyst Mary Johnson and The Senior Citizens League suggest a 2.5 percent COLA—matching the increase set for 2025. The Social Security Administration is expected to announce the 2026 COLA officially in October. Upcoming Social Security Changes Nearly 500,000 Social Security and SSI beneficiaries still to receive their payments by paper check, but that is expected to change in the near future. Under an executive order signed by President Donald Trump in March—titled "Modernizing Payments To and From America's Bank Account"—all federal disbursements, including Social Security, SSI, SSDI, vendor payments, and tax refunds, must be made electronically beginning after September 30, 2025. The Social Security Administration says that 493,775 payments are still being issued by physical check this month across all U.S. states and territories, accounting for 8.7 percent of total benefit disbursements.
Newsweek
a day ago
- Business
- Newsweek
Average Social Security Check Reaches $2,000 for First Time
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The average Social Security check for retirees has reached in excess of $2,000 for the first time. Why It Matters Social Security retirement benefits are paid to around 57 million Americans every month, helping shore up their finances for their post working years. What To Know According to data provided by the Social Security Administration (SSA), the average retired worker benefit in May 2025 was $2,002.39, the first time it has breached the $2,000 mark. This is up from an average of $1,999.97 in April, after steadily rising each month throughout 2025 so far. "The average Social Security benefit amount changes monthly," a spokesperson for the SSA explained to Newsweek. "Social Security benefits are based on a worker's highest 35 years of earnings. As wages tend to rise over time, each new group of retirees raises the average benefit amount, since their benefit calculations typically reflect higher earnings." Supplemental Security Income (SSI) payments, which are made to blind and disabled Americans, in May averaged $718.30 for its 7.4 million recipients. Stock image/file photo: A Social Security card with U.S. Dollars. Stock image/file photo: A Social Security card with U.S. Dollars. GETTY However, just because this is the average benefit across the board, it doesn't mean you can't receive more or less. Social Security retirement benefits are based on your highest 35 years of earnings, adjusted for inflation. In 2025, retiring at full retirement age—67—would provide a maximum monthly benefit of $4,018. Retiring at the earliest possible age of 62 would lower the maximum you can claim to $2,831, while delaying retirement until age 70 could increase it to $5,108. Stock image/file photo: A Social Security card with U.S. Dollars. Stock image/file photo: A Social Security card with U.S. Dollars. GETTY Increased Benefits for 2026? The cost-of-living adjustment (COLA), introduced in 1975, is a key feature of Social Security designed to ensure benefits keep pace with inflation and maintain their purchasing power over time. The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which reflects the spending habits of working Americans. The Bureau of Labor Statistics collects this data through a quarterly survey, tracking price changes across about 80,000 goods and services. These figures are then compiled into an index that shows percentage changes over time. In recent years, high inflation following the COVID-19 pandemic has led to larger-than-usual increases in benefits. In 2024, the COLA increased payments by 3.2 percent, and in 2023, a historic rise of 8.7 percent was granted due to runaway inflation caused by the coronavirus pandemic. For 2026, recipients can likely expect a 2.5 percent COLA, according to new estimates from independent Social Security and Medicare policy analyst Mary Johnson and The Senior Citizen's League—matching the adjustment made for 2025 benefits. The SSA will officially announce the 2026 COLA in October. What People Are Saying The Senior Citizens League executive director Shannon Benton said in a press release regarding the COLA prediction: "Seniors should be concerned as inflation continues to tick upward. TSCL's research shows that there's a serious disconnect between the inflation the government reports and the inflation that seniors experience every day. If the government tells us that prices are rising faster, it's likely that seniors are already feeling the crunch." What Happens Next As average benefit amounts tend to rise monthly, there will likely be another increase when data is released for June 2025.
Boston Globe
2 days ago
- Business
- Boston Globe
Boston Retirement Board approves 3 percent cost of living adjustment, rejecting larger increase sought by retirees
The board vote means retired municipal workers will receive a $450 cost of living adjustment, also known as a COLA payment, next fiscal year. Retired city workers have pushed for the city to bump that annual increase to their pension payments by $90, to $540, arguing that the current amount is not enough to offset inflation, let alone the rising costs of housing, transportation, groceries, and other living expenses. Advertisement This is a developing story. Check back for updates. Niki Griswold can be reached at
Yahoo
3 days ago
- Business
- Yahoo
The Social Security 2026 COLA Forecast Was Just Updated. There's Good News and Bad News for Retirees.
A recent survey from analytics company Gallup found that Americans are particularly worried about the economy, inflation, and Social Security. The Senior Citizens Leagues recently revised its forecast higher for Social Security's 2026 COLA because inflation is cooling more slowly than expected. Despite upward revisions, Social Security's 2026 COLA may be too small to entirely offset inflation for retired workers because of rising housing and medical costs. The $23,760 Social Security bonus most retirees completely overlook › A recent Gallup poll found that Americans are increasingly worried about the economy, inflation, and Social Security. Those three issues ranked among participants' five greatest concerns, and the percentage of people that "worry a great deal" about Social Security benefits reached a 15-year high. Those topics intersect in Social Security's cost-of-living adjustments (COLAs), annual pay increases that help beneficiaries keep up with rising prices across the economy. The Social Security Administration will announce the official 2026 COLA this October, and retired workers are probably hoping for a big raise. On that note, the lastest 2026 COLA forecast comes with good news and bad news. The good news is the forecast trended higher, meaning Social Security benefits could increase more than originally expected next year. The bad news is retirees may still feel as if the pay raise is too small. Read on to learn more. The Senior Citizens League (TSCL) is a nonprofit advocacy group focused on Medicare and Social Security policies. Its forecast in January said Social Security benefits would receive a 2.1% cost-of-living adjustment (COLA) in 2026, but TSCL has since revised that figure higher. Here are the forecasts the group published each month this year: January: 2.1% February: 2.3% March: 2.2% April: 2.3% May: 2.4% June: 2.5% Readers may wonder why the forecast has been revised higher so many times. Inflation is moderating less quickly than TSCL originally expected. In fact, inflation as measured by the Consumer Price Index (CPI) actually increased in May after slowing in the three preceding months. A larger COLA means a bigger pay increase for Social Security recipients. For instance, the average retired-worker benefit was $2,002 in May 2025. The 2.5% COLA forecast by TSCL would bring that figure to $2,052, meaning the average retiree would get an extra $50 per month, or $600 for the full year, in 2026. Alternatively, the 2.1% COLA originally forecast by TSCL would bring that average benefit to $2,044 next year. In that scenario, the average retired worker would receive an extra $42 per month, or $504 for the full year, in 2026. So the good news for retired workers on Social Security is the latest COLA forecast implies a larger pay increase next year. Measuring inflation is an inexact science because the extent to which rising prices impact someone depends on how they spend money. For instance, someone who does not attend school (nor pay tuition for anyone else) would not be affected by rising education costs. But higher education costs would greatly affect a college student. Social Security's COLAs are based on a subset of the CPI known as the CPI-W. It measures inflation using the spending habits of working-age adults, but they spend money differently than seniors on Social Security. Most notably, seniors spend more on housing and medical care, which means they are more sensitive to inflation in those categories. Unfortunately, inflation in those spending categories is running above average this year. To elaborate, overall CPI-W inflation measured 2.2% in May, but inflation within the categories of medical care and housing was 2.5% and 3.9%, respectively. Retired workers spend more money on those things, so the CPI-W is likely to understate inflation from their perspective. Here's the bottom line: TSCL recently raised its 2026 COLA forecast to 2.5%, which on the surface seems to be good news for retired workers on Social Security. However, underlying trends in the inflation data -- namely, housing and medical care costs are increasing faster than the overall CPI-W -- suggest a 2.5% pay increase in 2026 would be too small for many retirees. That's the bad news. If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these Motley Fool has a disclosure policy. The Social Security 2026 COLA Forecast Was Just Updated. There's Good News and Bad News for Retirees. was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
