Breaking News: Major Social Security COLA Increase for Seniors in 2025 | More Money Coming!

hey everyone welcome back to the channel today we're diving into a topic that's incredibly important for millions of Americans especially our seniors we're going to talk about the social security cost of living adjustment or Cola for 2025 if you rely on Social Security benefits or know someone who does this is definitely something you'll want to stick around for because there's some good news but it's a bit more nuanced than what we've seen in recent years so what exactly is happening with Social Security in 2025 the latest projections indicate that the cola increase is going to be around 2.6% now I know that sounds pretty modest especially compared to the huge bump we saw in 2023 which was a whopping 8.7% that jump was due to Skyhigh inflation that affected everyone's wallets especially the those on fixed incomes like Social Security recipients but things are a little different this time around here's the key reason why the increase is much smaller in 2025 inflation has cooled significantly for the first time since 2021 inflation has dropped below 3% this is a huge shift because inflation is the driving force behind the cola calculations every year the Social Security Administration looks at a specific measure of inflation called the Consumer Price Index for urban wage earners and clerical workers or CPI W they track inflation from July through September and then use that data to determine how much benefits will increase for the following year now we're currently sitting at a CPI W of about 2.9% and that's what's pointing us to this 2.6% Cola estimate but remember this is just an estimate the official Cola won't be announced until October 2024 after all the data has been collected however based on what we've seen so far 2.6% seems to be a solid prediction I know what you're thinking 2.6% doesn't sound like much especially if you're comparing it to the increases from previous years and you're right it's modest but it's important to keep in mind that a smaller Cola doesn't necessarily mean things are getting worse in fact it's a sign that inflation is stabilizing which is a good thing for everyone in the long run when inflation is high prices for essential goods and services like food Health Care and housing Skyrocket and that puts a huge strain on people living on fixed incomes particularly seniors so while the raise is smaller it's happening in the context of lower inflation which means your dollar should stretch a little further than it did in recent years when inflation was out of control let's talk numbers for a second a 2.6% increase might sound small but let's put it into perspective the average social security benefit for retired workers is around $1,800 per month with a 2.6% cola that works out to an extra $46 per month or about $550 per year it's not life-changing money but it does add up especially if you're someone who's trying to keep up with Rising costs on a limited budget now here's where it gets a little tricky while inflation overall has cooled certain sectors are still seeing price increases healthc care for example continues to get more expensive seniors tend to spend a significant portion of their income on medical expenses and even with Medicare outof pocket costs can be high so while the cola helps it's not necessarily enough to keep Pace with these specific Rising costs it's something we all need to be aware of and plan for as we move into 2025 another thing to consider is how this Cola fits into the broader picture of Social Security the system is facing long-term funding challenges as more more people retire and start drawing benefits there are fewer workers paying into the system the last few years have seen major debates about how to fix this whether that's raising the retirement age increasing taxes or cutting benefits these are difficult conversations but they're essential if Social Security is going to remain sustainable for future Generations but back to the present a lot of people have been asking whether this 2. 6% increase will actually make a difference especially given the specific Financial pressures seniors face the truth is every little bit helps even though it's a smaller increase than we've seen in recent years it will still provide some relief for those who depend on social security for the majority of their income it's also important to note that while the cola is designed to help offset inflation it doesn't necessarily cover all the increases in living costs that seniors experience for example if you live in an area where housing costs are skyrocketing or if you have significant healthc care needs the cola might not feel like it's keeping up with your personal inflation that's why Financial Planning and budgeting are still key even with the cola increase so what can you do to prepare for 2025 first stay informed the final Cola number will be announced in in October 2024 and that's when we'll know exactly how much Social Security benefits will increase but even before that start thinking about how that extra 2.6% might fit into your budget whether it's covering Rising health care costs putting a little more towards groceries or saving for unexpected expenses having a plan in place can help you make the most of your benefits also if you're nearing retirement or already retired it might be worth revisiting your retirement plan the cola is a helpful adjustment but it's not a substitute for a solid Financial strategy make sure you're taking advantage of all the tools available to you whether that's working with a financial advisor using budgeting apps or exploring additional sources of income like part-time work or investments in conclusion while the 2025 Cola increase is smaller than what we seen recently it's still a step in the right direction the fact that inflation is cooling means we're moving towards a more stable economic environment which is good news for everyone especially seniors living on fixed incomes the key takeaway here is that while the raise isn't huge it's still going to help Social Security beneficiaries keep up with Rising costs and every little bit counts so what do you think will the 2.6 6% increase make a difference in your life or do you think more needs to be done let me know in the comments below and don't forget to like subscribe and hit the notification Bell so you don't miss any of my updates on Social Security and retirement planning thanks for watching and I'll see you in the next video