Almost half a million retirees in Mississippi, along with thousands of others, are expected to see their Social Security benefits go up in the new year.

In October, the Social Security Administration announced a 2.5% cost-of-living adjustment (COLA) for 2025. On average, Social Security retirement benefits will increase by around $50 a month starting in January.

“Social Security benefits and SSI payments will rise in 2025, providing support to tens of millions of people as they manage expenses, even as inflation begins to ease,” Social Security Commissioner Martin O’Malley said in an October statement.

Over the past decade, COLA increases have averaged about 2.6%, with a peak of 8.7% in 2023. In 2024, the COLA increase was 3.2%.

Across the country, nearly 68 million Social Security recipients will see a 2.5% increase in their benefits. For the 7.5 million people receiving SSI, the higher payments will start on Dec. 31, 2024. Here’s an overview of Social Security in Mississippi.

How many people in Mississippi receive Social Security?

As of December 2023, 469,560 retirees in Mississippi were receiving Social Security benefits, according to official figures. Almost half a million residents!

In addition, 106,000 people were receiving Social Security disability benefits. Payments also went to 43,000 widows, widowers, and parents, 14,000 spouses, and approximately 59,000 children.

How old do I have to be to collect Social Security?

You can start receiving Social Security retirement benefits as early as age 62, but your payments will be reduced if you claim them before reaching your “full” retirement age.

You can check the Social Security Administration’s website to see how your benefit amount changes depending on when you start taking it.

The full retirement age has gradually increased over time. For example:

• If you were born between 1943 and 1954, full benefits began at age 66.
• For those born in 1955, the full retirement age is 66 years and 2 months.
• It increases slightly for each birth year until it reaches 67 for those born in 1960 or later.

If you wait to claim your benefits past your full retirement age, up until age 70, your payments will increase.

People can sign up for text or email notifications to know when a new message, like their COLA notice, is available in their My Social Security account, according to Social Security.

Will Medicare and other benefits change?

Details about Medicare changes for 2025 can be found at their official website. Social Security beneficiaries who are also enrolled in Medicare can check their 2025 benefit amount in the Message Center of their My Social Security account.

How is the COLA calculated?

The Social Security Act outlines the process for calculating the COLA.

The annual COLA is based on the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is determined by the Bureau of Labor Statistics within the Department of Labor.

The Social Security Administration provides a list of annual COLA increases dating back to 1975. Before that, any increases had to be approved by Congress, and they didn’t occur yearly.

The 2025 COLA of 2.5% is the smallest adjustment since January 2021, when the increase was only 1.3%. Here’s a ranking of the different COLAs throughout history:

Lowest COLAs:

• 0%: 2010, 2011, 2016
• 0.3%: 2017
• 1.3%: 1987, 1999, 2021
• 1.6%: 2022
• 1.7%: 2013, 2015

Highest COLAs:

• 14.3%: 1980
• 11.2%: 1981
• 9.9%: 1979
• 8.7%: 2023
• 8%: 1975
• 7.4%: 1982
• 6.5%: 1978
• 6.4%: 1976
• 5.9%: 1977, 2022

How much of my paycheck is taxed to fund Social Security?

Each year, adjustments are made in January based on the rise in average wages. In 2025, the maximum earnings subject to Social Security tax will increase from $168,600 to $176,100.

• For employees and employers: Each pays 6.2% of wages up to the maximum taxable amount.
• For the self-employed: They pay 12.4% of their earnings up to the same limit.

In 2023, total income to the combined OASI (Old-Age and Survivors Insurance) and DI (Disability Insurance) Trust Funds reached $1.351 trillion. This included:

• $1.233 trillion from net payroll tax contributions
• $51 billion from taxes on benefits
• $67 billion from interest income