Personal data of millions of Americans hacked in data theft
Millions of social security numbers were hacked after a massive data theft. Here’s how you can protect yourself.
This year, nearly 68 million American retirees, veterans and dependents rely on Social Security benefits each month to make ends meet. For nearly 30% of Americans, these monthly benefits are their only source of income.
So you can’t blame Social Security recipients for eagerly awaiting news each year about the annual cost-of-living adjustment (often referred to as COLA) and its impact on benefits.
Benefits are initially calculated based on a worker’s earnings during their employment, but over time these payments can lose value. To address this problem, legislation was passed in 1973 that created COLA to counteract the rate of inflation, essentially the rate at which prices rise.
The Social Security adjustment varies each year. In 2024, there was a 3.2% increase, while in 2023, Americans saw an 8.7% increase.
So what about New Jersey beneficiaries who, on average, receive the largest Social Security checks each month?
What is Social Security’s projected COLA for 2025?
Current estimates call for a COLA increase of 2.57% in 2025. That’s less than the 2.63% increase projected by the Senior Citizens League, a nonprofit advocacy group. But those estimates will change by the end of September when the calculations are finalized.
The COLAs are based on third-quarter Consumer Price Index data for urban wage earners and office workers, which is calculated each month by the Bureau of Labor. The data collected between July and September ultimately determines the final COLA amount each year.
If the COLA estimates prove accurate, Social Security recipients could see an extra $50 or so per month—and for New Jersey residents, it could be as much as $54 on average. It’s worth noting that this increase doesn’t take into account potential Medicare Part B increases, which are automatically deducted from Social Security benefits.
Is Social Security’s COLA enough to combat inflation?
Despite legislation and tools such as higher interest rates from the Federal Reserve, some say the increases do not adequately reflect the increase in costs for seniors.
In July, a retiree survey of more than 2,000 seniors found that 71 percent said persistently high prices due to inflation have forced them to dip into their savings, according to the Senior Citizens League. Nearly 80 percent said their monthly budget for essentials – housing, food and medicine – is higher than it will be in 2023, the survey found. And 63 percent worry their retirement income will not be enough to cover the cost of essentials.
In fact, the 2024 Loss of Buying Power study found that the average pension for retiring workers in 2024 will be only about 80 cents on the dollar compared to 2010. According to the study, the loss of purchasing power is mainly due to the rapidly rising costs of expensive items such as housing and transportation.
Today’s average monthly Social Security benefit for retirees of $1,860 would need to be raised to about $2,230, or $370 more per month, to match the 2010 monetary value, the study shows.
Social Security Rates in New Jersey
The amount of Social Security benefits is determined by two factors: age at filing and lifetime earnings. While state of residence plays no role in Social Security benefits, geography plays an indirect role, as median income varies from state to state.
The Social Security Administration has released an annual statistical supplement that breaks down benefit data by variables such as age, gender, and geographic location. The 2024 supplement breaks down average monthly Social Security benefits for retirees beginning in December 2023. The following states have the highest benefits:
- New Jersey: $2,100
- Connecticut: $2,084
- Delaware: $2,064
- New Hampshire: $2,039
- Maryland: $2,008
- Michigan: $2,005
- Washington: 1,992 USD
- Minnesota: 1,982 USD
- Indiana: 1,952 USD
- Massachusetts: 1,946 USD
These are just averages, meaning not every retiree in New Jersey receives these benefits each month. The reason some states receive more than others — and why New Jersey comes out on top — is based on several factors, including length of employment, income and the age at which you retire.
Generally, COLAs are higher in the states mentioned above because higher benefits mean higher COLAs. For example, the median monthly payment for a retiree in New Jersey is $2,100. Assuming the COLA will be 2.57% in 2025, New Jersey beneficiaries could collect an average of $53.97 extra.
It should also be noted that New Jersey is one of the ten states with the highest average income and therefore the average monthly income of its residents is also higher.
Some even consider it a “coincidence” that some states have higher average Social Security benefits. Some people move after they retire, which would destroy any relationship between their pension and the average income in their state of residence, according to The Motley Fool, a private financial and investment advisory firm.
Social Security Benefits in New Jersey: A Breakdown
Nearly 1.7 million New Jersey residents are recipients of Social Security benefits, according to the latest data released in May by the Social Security Administration. Those recipients would receive a total of $3.35 billion in payments each month in 2023.
Who benefited from these 1.7 million people was given the following breakdown:
- Retired workers: 1,316,238
- Disabled workers: 162,912
- Widows, widowers and parents: 86,530
- Spouses: 46,089
- Children: 86,735
Among them are about 1.4 million seniors over 65 years of age.
COLA resources, calculator
COLA calculations will be on hold until the Labor Department releases its September Consumer Price Index data, which is scheduled to happen at 8:30 a.m. ET on Oct. 10. In the meantime, you can use the following resources to figure out your potential Social Security payments:
- Benefit estimates depend on your birth date and earnings history. The Social Security Administration’s Quick Calculator does not access earnings history, but estimates earnings based on the information you enter. It’s a helpful resource, but be aware.
- The Social Security Administration proposes that every retiree receive a “My The free and secure account also offers users the ability to request a replacement Social Security card, set up direct deposits, and check the status of an application.
Email: [email protected]; X (formerly Twitter): @LoriComstockNJH or on Facebook.
