The Social Security Administration has announced a 2.5% Cost-of-Living Adjustment (COLA) for 2025, meaning retirees will see an average boost of about $50 per month in their benefits. While this adjustment aims to help beneficiaries keep up with rising prices, experts say there are smart strategies you can use to boost your Social Security benefits even further. Here’s what you need to know:
1. Delay Collecting Benefits to Maximize Payouts
If you want bigger monthly checks, consider holding off on claiming benefits. While you’re eligible to start collecting as early as age 62, you’ll receive a reduced amount. Waiting until your Full Retirement Age (FRA)—67 for those born in 1960 or later—ensures you get your full benefit. If you delay even further, up to age 70, your benefits increase by about 8% per year.
2. Increase Your Earnings Before Retirement
Social Security benefits are based on your 35 highest-earning years. If you had some low-earning years, consider working longer or taking on additional jobs to replace them with higher earnings. Promotions, career changes, or side jobs can all contribute to a bigger monthly benefit when you retire.
3. Check for Errors in Your Earnings Record
Mistakes in your earnings record could cost you thousands of dollars in lost benefits. Log into the Social Security Administration’s online portal to review your earnings history and correct any discrepancies. If your record is wrong, your benefits could be lower than what you actually deserve.
4. Take Advantage of the Social Security Fairness Act
The Social Security Fairness Act recently removed two major benefit-reducing provisions—the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). This is good news for many public service workers and retirees, as it could result in a noticeable increase in their benefits.
5. Stay Up-to-Date on Policy Changes
Social Security rules and policies change often due to new legislation or economic adjustments. Stay informed by regularly checking official announcements or consulting financial advisors who can help you navigate these updates. Small adjustments now can mean a lot more money in your pocket later.
Key Takeaway
While the 2.5% COLA for 2025 is a welcome increase, relying on it alone may not be enough. By delaying benefits, increasing your earnings, and making sure your records are accurate, you could secure a bigger and more stable income in retirement.
