Here's how much Social Security's estimated cost of living adjustment (COLA) could boost the average spousal benefit in 2025

We are about a week away from announcing the 2025 Social Security Cost of Living Adjustment (COLA). All benefit recipients will soon be able to estimate how much their checks will increase next year, with the new benefit amounts taking effect in January.

Of course, the main question is how much more retirees will get next year, but those who apply for spousal benefits also need to get bigger checks. However, the latest forecasts suggest broader budget changes may be in order for 2025.

The COLA in 2025 is expected to be around 2.5%.

The latest estimates from the Senior Citizens League (TSCL) put the Social Security COLA at about 2.5% in 2025. That's 0.7% less than the 2024 COLA. This is due to cooling inflation. There is a small chance that the COLA could be higher depending on where September inflation data comes in, but that is unlikely.

A 2.5% COLA would increase a retired worker's average pension from $1,920 per month in August 2024 to $1,968 per month – an increase of $48. If your current benefit is higher, your checks will likely increase even further. On the other hand, if you have lower performance, you will receive less.

Spousal Social Security benefits are typically less than retiree benefits because of the formula used to calculate them. They are worth no more than half of the employee's pension at full retirement age (FRA). The average spousal pension is $910 per month in August 2024. A 2.5% COLA would add about $23 per month, bringing the new average to about $933 per month in 2025.

Combined, a couple receiving the average retirement benefit and the average spousal benefit would receive an additional $71 per month with a 2.5% COLA. That's another $852 per year.

Outlook for 2025

We won't find out the actual COLA for 2025 until October 10th. The Social Security Administration will post the news on its website. Once you know how much it is, you can estimate your 2025 checks by adding the COLA percentage to your existing checks. That might be off by a dollar or two, but it should be pretty close.

If you're still not sure how much you'll receive, look for a personalized COLA notice to be sent to you in December. Those with my Social Security accounts should be able to access the notice early this month. You will also receive a notification in the mail.

Compare your new monthly Social Security income to your average monthly expenses. Your checks may not go as far as you expected. Many believe that COLAs don't actually help benefits keep pace with inflation as they should.

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To combat this, you may need to turn to other sources of retirement income, such as:

• Personal savings: Personal savings are the ideal supplement to Social Security if you have it. You may need to increase your withdrawals from your retirement account in 2025 to cover what Social Security doesn't cover.

• A job: A job gives you another source of consistent monthly income in addition to your Social Security checks. This could also reduce the rate at which you spend your personal savings.

• Other state benefits: If you are unable to work and do not have sufficient savings, you may be eligible for other government benefits, such as food, housing, utilities, and health care. These programs generally have income requirements and the application processes can take some time. Therefore, it is best to check these out as soon as possible if you plan to claim them in 2025.

Outline a plan to cover your expenses before your new checks arrive. Then, after a month or two of using your new performance, check in on how you're doing and make adjustments as needed to get through the rest of the year.

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Here's how much Social Security's estimated cost of living adjustment (COLA) could boost the average spousal benefit in 2025. The study was originally published by The Motley Fool