Effective January 2025, the monthly payments will increase by 2.5% for Social Security beneficiaries. The shutdown will include various inflationary trends positioning retirees to pocket an estimated $50 per month, the Social Security Administration has sounded. Nearly 72.5 million beneficiaries, including retirees, children, and those with disabilities, are poised to receive the increases. The measure, according to Commissioner Martin O’Malley, is designed to allow the general populace to keep up with their living expenses, but there is a mood among beneficiaries that this may not be enough to allow them to have their most pressing needs taken care of.
In summation, 82-year-old retiree Sherri Myers recounts what such changes mean to her daily life:”I try to take care of my health, but when I go to the grocery store, I simply can’t afford many of the things I need. Vegetables, for example, are out of my budget. Even something as basic as a fast-food combo meal is expensive.”
Smaller adjustments compared to previous years
The increase is no more than 2.5%, compared to a whopping 3.2% in 2024 or a historical high of 8.7% in 2023 due to astronomical inflation that required extraordinary increases. This lesser increase reflects the impact of more moderate inflation rates in recent months.
Letters detailing new amounts will be sent to beneficiaries by the Social Security Administration in early December. On December 31, Supplemental Security Income beneficiaries will receive their first check. The payroll tax-funded program will also increase the income cap that is subject to tax, from $168,600 in 2024 to $176,100 in 2025.
The future of Social Security at risk
Even so, the Social Security system risks a number of billion dollars in losses. Last year’s report warned that if nothing were done to stabilize the program’s finances, the trust fund would be depleted by 2035- resulting in a benefit reduction to 83% of scheduled amounts. Jo Ann Jenkins, AARP’s chief executive officer, stated in a release the importance of urgency in dealing with the problem. “We must make informed decisions that are going to ensure Social Security a sustainable safety net for future generations.”
On the political side, proposals aimed at resolving the trust fund deficit have produced conflicted points of view from among presidential candidates. Kamala Harris has called for an increase in taxes on large corporations and billionaires to shore up the program, while Donald Trump has promised to protect the fund through economic growth strategies, putting the option of raising the retirement age off the table for him. In a few recent interviews, both candidates have spoken about this issue as it is an important subject on the political agenda of the country.
