Will my Social Security statement estimates include 2025 COLA increases?

The estimates in your MySocialSecurity account do NOT include future COLAs. They're calculated based on current dollars and your earnings history. The 2025 COLA won't be announced until October 2024, and it will apply to benefits starting January 2025. So if you're planning to claim in 18 months, you'll likely see at least one COLA increase added to whatever estimate you're seeing now. I've been through this recently - my actual benefit ended up being about 3.7% higher than my last estimate because of the COLA that happened between when I checked my estimate and when I actually filed.

congrats on nearing retirement! i looked at the same thing last yr... the estimates r just based on NOW money, no future colas included. the SSA cant predict future colas since they depend on inflation we havent had yet lol. i retired in jan and got exactly what my estimate said plus the cola they announced in oct

Your Social Security benefit estimates are calculated based on your earnings history up to the current year and assume you'll continue earning at roughly the same level until you claim benefits. They do NOT include any future COLA increases - these are applied after benefits begin. The estimates also show three different amounts: 1. If you claim at early retirement (62) 2. If you claim at full retirement age (FRA, which varies by birth year) 3. If you delay until age 70 The difference between these numbers is substantial - often 75-80% more if you wait until 70 vs. claiming at 62. Have you considered your optimal claiming strategy?

I just went through this! Called SSA to ask the EXACT same question about 3 months ago because I was confused too. And let me tell you, I spent TWO DAYS trying to get through to someone. Kept getting busy signals or disconnected after waiting for hours. So frustrating!!

FYI - The Social Security estimates shown in your account are actually pretty conservative in my experience. They assume your earnings will stay constant until retirement, but if you're getting raises or promotions, your actual benefit might be higher. Also, they use your highest 35 years of earnings to calculate benefits. If you don't have 35 years of work history yet, or if your recent earnings are much higher than early in your career, continuing to work could significantly increase your benefit beyond what's shown in the estimate.

NOBODY at SSA can predict future COLAs!!! The numbers in ur account are TODAY'S DOLLARS ONLY!! The COLA changes every year based on some complicated CPI formula and they don't announce it until October for the next year. Last year it was 3.2% but it's been as high as 8.7% (2023) or as low as 0% (2016). Anyone who tells you they know what 2025 COLA will be is LYING!!

Thanks everyone for the helpful information! So to summarize: my estimate is in today's dollars, doesn't include future COLAs, and might actually be on the conservative side if I continue working and replace some lower-earning years. I'll plan my budget based on the current estimate but can reasonably expect it might be a bit higher when I actually claim. This community is amazing!

As someone who just started receiving benefits this year, I can confirm what others have said - the estimates definitely don't include future COLAs. But here's something else to consider: if you're planning to file in 18 months, you might want to create a MySocialSecurity account if you haven't already and check your earnings record for accuracy. I found a couple of missing quarters from jobs I had in the 1990s, and correcting those actually increased my benefit estimate by about $40/month. It took a few months to get the corrections processed, so doing it now gives you time to fix any issues before you file. The SSA has a process for reporting missing earnings - you just need to provide W-2s or other documentation.

Another thing to keep in mind is that your MySocialSecurity account will automatically update your benefit estimates each year based on your most recent earnings. So if you're still working and earning income, you'll see those estimates gradually increase over the next 18 months as your 2024 and 2025 earnings get factored in. I found it helpful to screenshot my estimates periodically so I could track how they changed as I got closer to retirement. Also, don't forget that if you have a spouse, you'll want to coordinate your claiming strategies since spousal benefits can sometimes provide additional income - especially if there's a big difference in your work histories or benefit amounts. Good luck with your planning!

One thing that might help with your planning is to understand that Social Security benefits are also subject to federal income tax if your combined income (Social Security + other retirement income + half of your Social Security benefits) exceeds certain thresholds. For individuals, that's $25,000, and for married filing jointly, it's $32,000. Up to 85% of your benefits could be taxable depending on your total retirement income. This is something the estimates don't show you - they're gross amounts, not what you'll actually receive after taxes. So when you're doing your retirement budget, make sure to factor in potential taxes on your Social Security benefits, especially if you have other sources of retirement income like 401(k) withdrawals or pension payments. A tax professional who specializes in retirement planning can help you estimate this more precisely.