Retiring in 2025? Discover 4 Must-Know Facts About Social Security!

Social Security is a lifeline for over 50 million retirees, providing essential benefits that total nearly $100 billion annually.

In addition to retirement payments, it offers disability and survivor benefits to millions more.

The importance of Social Security is clear: About 12% of men and 15% of women over age 65 rely on it for at least 90% of their income, according to the Social Security Administration.

As we enter 2025, understanding key facts about Social Security can help guide your retirement planning and ensure you make informed decisions.

1. Social Security Helps Millions Stay Above Poverty

Social Security keeps millions of Americans out of poverty. According to the Center for Budget and Policy Priorities, without it, more than 22 million people would fall below the poverty line.

The Department of Health and Human Services 2024 poverty guidelines give a sense of these financial thresholds:

• 1 person: $15,060
• 2 people: $20,440
• 3 people: $25,820
• 4 people: $31,200

For many retirees, Social Security is the difference between financial stability and hardship.

2. Social Security Alone Might Not Be Enough

While Social Security helps many avoid poverty, it’s rarely enough for a comfortable retirement.

As of November 2024, the average monthly benefit for retirees was about $1,925, or roughly $23,000 annually.

Creating a my Social Security account allows you to see your estimated benefits based on your earnings history.

While those with higher earnings will receive higher benefits, most people will need additional income sources to maintain their standard of living. Here are some common ways to supplement Social Security income:

• Dividend-paying stocks: Regular payouts from investments.
• Retirement accounts: Withdrawals from 401(k) or IRA accounts.
• Rental income: Earnings from property investments.
• Pensions: Employer-sponsored retirement plans.
• Annuities: Guaranteed income streams.

By diversifying your income sources, you can enjoy greater financial security during retirement.

3. Cost-of-Living Adjustments (COLAs) Are Limited

One advantage of Social Security is its annual cost-of-living adjustments (COLAs), which help benefits keep pace with inflation.

Without these, retirees would see their purchasing power diminish over time. Here’s how average Social Security benefits have grown:

• 1964: $78 per month
• 1984: $461 per month
• 2004: $955 per month
• 2024: $1,925 per month*

(*As of November 2024)

The 2025 COLA is 2.5%, following adjustments of 3.2% in 2024 and 8.7% in 2023. Despite these increases, many retirees still struggle to cover rising expenses, particularly healthcare costs.

A recent survey found that 54% of retirees believe the 2025 COLA is insufficient, and 31% described it as “completely insufficient.”

4. You Can Increase Your Benefits

There are strategies to boost your Social Security benefits. One key decision is when to start collecting.

Benefits can begin as early as age 62, but they’ll be lower than waiting until full retirement age or even age 70, which maximizes your monthly payments.

For most retirees, delaying benefits until age 70 can be the best financial strategy. While starting early allows you to collect benefits sooner, waiting ensures higher monthly payments over your lifetime.

Maximizing your earnings during your working years is another way to increase benefits. Here are a few strategies:

• Ask for raises: Increase your income whenever possible.
• Seek higher-paying roles: Don’t hesitate to explore new job opportunities.
• Switch to a more lucrative career path: Consider industries with higher earning potential if feasible.

Strategic planning, combined with supplemental income sources, can help ensure a financially secure retirement.

Start preparing now to make the most of your Social Security benefits while creating a comprehensive retirement plan.

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