Benefits are rising in the new year, but for many, they still won’t be enough to live on.
It’s official: After months of speculation, we finally have an answer regarding 2025’s Social Security cost-of-living adjustment (COLA). Next year, benefits will increase by 2.5% based on inflation data for the months of July, August, and September.
At first, a 2.5% increase may not seem like much to write home about. But 2.5% is by no means the smallest COLA Social Security beneficiaries have ever received, so you can take some comfort in that.
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You should also know that 2025’s Social Security COLA should raise the average monthly benefit by $49. And once it takes effect, the average monthly benefit in January will be $1,976.
If that sounds like it’s not enough money to live on, well, you may be right. Some people may be able to make an annual income of roughly $23,700 work for them. But if that doesn’t sound doable for you, you should know that there are steps you can — and should — take to boost your monthly Social Security checks.
How to score a larger monthly Social Security benefit
First, let’s clear up one thing. It’s best to avoid a situation where you’re retiring on Social Security alone. Those benefits will generally replace about 40% of your pre-retirement wages if you earn an average income. And most seniors need much more replacement income than that to cover their bills comfortably.
But if you’re behind on retirement savings, or you just plain want to secure as large a monthly benefit as possible, then there are few things you can do to make that happen. And the first is to make sure you work for at least 35 years.
The reason is that the Social Security Administration (SSA) takes your 35 highest years of earnings into account when calculating your monthly retirement benefits. For each year you’re missing an income within that top 35, a $0 gets factored into your personal benefit equation, bringing that number down.
Secondly, make sure the SSA has accurate records of your earnings on file. Underreported income could result in a smaller monthly benefit down the line.
You can access your annual earnings statement by creating an account on the SSA’s website. If you spot inaccuracies, report them.
Finally, delaying your Social Security claim beyond full retirement age will result in a boosted monthly benefit. For each month you hold off past that point, your benefit increases by 2/3 of 1%, or 8% per year. If you’re looking at a full retirement age of 67, filing at 70 means locking in a monthly benefit that’s 24% higher.
And you should also know that you can’t accrue delayed retirement credits that boost your monthly Social Security checks beyond age 70. So once you turn 70, it pays to file right away.
Don’t settle
The average monthly $1,976 Social Security benefit in 2025 may be enough for some seniors to manage on. But if it sounds too small for you, know that there are ways to set yourself up with a much higher benefit — and avoid the financial stress so many retirees face today.
