In 2025, retirees in states with higher average Social Security benefits, like New Jersey and Massachusetts, will see the largest dollar increases from a 2.6% cost-of-living adjustment.
Top States for Social Security COLA Increases in 2025: Where Retirees Will See the Biggest Dollar Gains
According to The Motley Fool, in 2025, retirees in certain states will see the biggest increases in their Social Security benefits due to a 2.6% cost-of-living adjustment (COLA). This percentage is the smallest raise since 2021, but because benefits are higher in some states, retirees will get more money. For example, in New Jersey, where the average benefit is $2,100, retirees could receive an extra $54.60 each month, while in Massachusetts, with an average benefit of $1,946, retirees might get $50.60 more each month.
The reason for these larger increases is that retirees in states with higher average benefits will get more money from the COLA. States like New Jersey, Connecticut, and Delaware have higher average benefits, so their retirees will see the biggest dollar amounts. This is because COLAs are added to the current benefits, so those with higher benefits get a bigger raise in actual dollars.
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2.6% COLA: How 2025 Social Security Benefits Will Vary by $50-$60+ per Month in States with Highest Median Benefits: $2,100-$2,400 (PHOTO: CPA Practice Advisor)
How Higher Incomes and Relocation Affect Social Security Benefits and COLA Adjustments
Higher benefits in these states are linked to higher average incomes. Retirees in states with high incomes, like New Jersey and Massachusetts, start with larger benefits, so their COLAs are larger in dollar terms. Additionally, some retirees might move to states with different living costs, which can also affect their benefits.
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