Social Security advantages typically enhance yearly, and that is because of this system’s annual price of dwelling adjustment (COLA). The COLA is supposed to assist retiree advantages hold tempo with inflation, so it is not unusual to see advantages enhance by just a few proportion factors annually.
Over time, these proportion factors have compounded into a big enhance. Here is what the typical Social Safety verify was in 2004 and what it’s now.
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Making an attempt to maintain tempo with inflation
In 2004, the average monthly Social Security check was $954.89, or almost $11,459 yearly. Following a number of latest years of a few of the highest inflation in 40 years, retirees have seen their advantages enhance considerably.
The typical Social Safety verify in November 2024 was $1,925.46, or about $23,105 yearly. Nonetheless, the 2025 COLA is 2.5%, so we are able to assume the typical month-to-month profit verify will rise to $1,973.60, or $23,683 yearly.
Meaning the typical month-to-month Social Safety verify has elevated 107% since 2004. Sounds fairly good, proper? Effectively, not in accordance with the nonpartisan Senior Residents League (SCL). Of their annual 2024 examine, the SCL mentioned that advantages have misplaced 20% of their buying energy since 2010. The SCL blames the eroding buying energy on inadequate COLAs, which the group claims have trailed inflation in 8 of the final 15 years.
Moreover, the SCL would favor COLAs to be decided by the Shopper Value Index for People 62 Years of Age and Older (CPI-E) as an alternative of the Shopper Value Index for City Wage Earners and Clerical Employees (CPI-W). The SCL believes the CPI-E higher displays the prices of retirees and would result in extra correct COLAs.
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