The Social Security Administration (SSA) has announced that in 2025, some states will see larger increases in Social Security benefits than others, largely due to how payments are calculated. The annual cost of living adjustment (COLA) is intended to help beneficiaries maintain their purchasing power in the face of rising costs.
For 2025, the Senior Citizens League has forecasted a modest 2.6% COLA increase, which is expected to be the lowest since 2021. However, the way Social Security is structured means that not every state will experience these increases in the same way.
Benefit disparities
Social Security payments are calculated based on lifetime earnings and the age at which beneficiaries start claiming benefits. This can lead to differences in the actual monthly benefit amounts from state to state. States with higher median incomes generally see larger Social Security checks because higher lifetime earnings result in larger payouts. As a result, beneficiaries in some states will receive larger COLA increases than others.
Largest benefits
According to a study by Motley Fool, some states with the highest median monthly Social Security checks include:
| State | Median Monthly Check |
|---|---|
| New Jersey | $2,100 |
| Connecticut | $2,084 |
| Delaware | $2,064 |
| New Hampshire | $2,039 |
| Maryland | $2,008 |
| Michigan | $2,005 |
| Washington | $1,992 |
| Minnesota | $1,982 |
| Indiana | $1,952 |
| Massachusetts | $1,946 |
These states benefit from higher COLA increases because their retirees tend to have earned more over their careers, boosting their Social Security payouts. For instance, the average retiree in New Jersey could expect an additional $54.60 per month in 2025, while Massachusetts retirees may see an extra $50.60.
States Receive More
The primary reason for the disparities in Social Security benefits across states is the variation in median incomes. States with higher earnings over time translate to higher Social Security payouts. Alex Beene, a financial literacy professor, explains that these states are also more likely to receive larger COLA increases due to their already elevated benefits.
Even though some states may benefit more from COLA increases, retirees in all states will still see a boost in their Social Security checks. The cost-of-living adjustment applies to everyone, regardless of where they live, ensuring that everyone gets some relief from rising inflation.
Social Security in 2025
If the forecasted 2.6% COLA increase goes into effect in January 2025, Social Security beneficiaries can expect the following payment amounts across different programs:
| Federal Program | Average Payment | After 2.6% COLA |
|---|---|---|
| Retirement Benefits | $1,949 | $2,000+ |
| Age 62 | $2,780 | $2,852 |
| Age 67 | $3,921 | $4,022 |
| Age 70 | $5,000 | $5,130 |
| Survivor Benefits | $1,544 | $1,584 |
| Individual Survivor | $1,819 | $1,866 |
| 2 Children Survivors | $3,748 | $3,845 |
| SSDI Benefits | $1,577 | $1,618 |
| Blind SSDI Recipients | $2,657 | $2,725 |
| Maximum SSDI Payment | $3,921 | $4,022 |
| SSI Benefits | $716 | $735 |
| Individual SSI Payment | $968 | $993 |
| Couple SSI Payment | $1,452 | $1,489 |
| Essential Person (SSI) | $484 | $496 |
Means for beneficiaries
While some retirees in states with higher median incomes may see more significant increases in their Social Security checks, all beneficiaries will experience a boost due to the COLA adjustment. For many, this increase is vital in keeping up with the rising costs of everyday items such as food, housing, and healthcare. Even though some states may see more substantial checks, everyone receiving Social Security will benefit from the annual increase.
Ultimately, while the 2025 COLA forecast of 2.6% is lower than in recent years, it still provides an essential adjustment to ensure retirees and other beneficiaries can maintain their standard of living.
FAQs
Why do some states receive larger Social Security increases?
Higher median incomes lead to larger Social Security payouts.
How much is the COLA increase expected in 2025?
The COLA increase is forecasted to be around 2.6%.
Which states receive the highest Social Security checks?
New Jersey, Connecticut, and Delaware have the highest checks.
Does COLA apply to all Social Security recipients?
Yes, COLA adjustments apply to all recipients, regardless of location.
How much will Social Security increase in 2025?
On average, checks will increase by 2.6%, raising monthly payments.
