Social Security Update: A Map Shows Which States Are Likely to Get the Smallest Raises!

Economists predict that Social Security recipients may see a modest 2.57 percent cost-of-living adjustment (COLA) for 2025. While this is still a slight increase, it’s much lower than the 8.7 percent bump seen in 2023 and the 3.2 percent increase for 2024. The final adjustment has yet to be officially announced, but this estimate is based on current inflation trends.

The lower projected increase has sparked conversations about whether the 2025 COLA will be sufficient to keep up with rising inflation as living costs in the U.S. continue to fluctuate. Various factors play a role in determining each individual’s Social Security increase, including retirement age and the recipient’s lifetime earnings.

Location is also a key factor, with some states historically seeing lower Social Security benefits due to their lower median incomes.

For example, in states where retirees typically earn lower Social Security payments, the percentage increase may not make a significant impact. According to an analysis by the Motley Fool, some states are expected to see much smaller boosts in their monthly Social Security payments for 2025 compared to others.

Mississippi is projected to have the lowest average increase. In December 2023, the median Social Security benefit in Mississippi was $1,673 per month, and with a 2.57 percent increase, that amount will only go up by $41.80. Similarly, New Jersey retirees, who typically receive more, with a median monthly benefit of $2,100, will still see a larger increase of about $52.50.

The disparity in these Social Security increases is largely due to the fact that states with lower median incomes naturally produce lower Social Security payments. Financial literacy experts, such as Alex Beene from the University of Tennessee at Martin, note that many of the states expected to see smaller increases have a common thread – lower wages during their residents’ working years.

States with historically lower median incomes, therefore, see smaller increases, which means retirees in these states will face smaller COLA benefits compared to higher-income states.

Social Security plays a vital role in providing financial security for many older Americans, particularly in states where the cost of living remains high. However, despite the yearly COLA, concerns remain about whether the estimated 2025 increase will be enough to address the rising costs of essentials like food, healthcare, and housing.

Retirees in states expected to see smaller increases may feel the financial strain more sharply than their peers in wealthier states.

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With inflation affecting everyone, the varying impact of the Social Security increase highlights the broader economic challenges facing retirees across the country. As we await the final COLA announcement, the question remains: Will the predicted 2.57 percent increase for 2025 be enough to help Social Security recipients keep up with their growing expenses?