Long Islanders see first round of February Social Security benefits

Social Security payments are top of mind for many retirees as the New Year has brought with it a rule change and increased monthly payments that will benefit more than an estimated 72.9 million Americans, including 582,000 Long Islanders. 

Starting in January, Social Security recipients saw a 2.5% increase in their monthly payments as the annual cost of living adjustment (COLA) took effect. Benefits for February were sent out Wednesday. Social Security payments are sent on the second, third and fourth Wednesday of the month, depending on the recipient’s birth date.

A retired worker would see their average benefit of $1,927 increase to $1,975 after the 2.5% increase, roughly a $48 improvement, according to the Social Security Administration. For comparison, COLA for 2024 was 3.2%, and was a much larger 8.7% in 2023, according to the agency.

The age at which Americans can start collecting Social Security was increased early last month to 66 years and 10 months, the second-to-last increase before reaching 67 in 2026. Benefits can be claimed as early as 62, but at a 30% reduction in place for life, according to the Social Security Administration.

In January, the average Social Security payment averaged $1,976, according to the Social Security Administration.

Nassau and Suffolk residents received an estimated $1.21 billion in Social Security benefits each month in 2023, the latest year county data is available from the Social Security Administration.

Additionally, an estimated 3.2 million Americans are expected to start receiving Social Security benefits for the first time, or see existing benefits increase after a new federal rule was signed into law by former President Joe Biden. The timeline for when recipients will get the extra funds is unclear.

The Social Security Fairness Act, signed into law on Jan. 5, boosts Social Security payments for current and former public employees, affecting teachers, firefighters, police officers and other civil servants who have pensions.

The act rescinds two provisions — the Windfall Elimination Provision and the Government Pension Offset — that limit Social Security benefits for some recipients of public pensions. Impacted Islanders could see benefits grow $360 to $700 on average, by December 2025, according to the Congressional Budget Office.

An estimated 745,679 people, or 1% of all Social Security recipients, and about 2.1 million people, or 3% of all recipients, will benefit from the scrapping of the pension offset and windfall provision, respectively.

Local financial advisers said additional funds in retirement are always welcome, especially given Long Island’s higher cost of living. 

“Any amount of money that is added to any retiree’s pockets is only going to enhance their life,” said Domenick D’Andrea, co-founder of DanDarah Wealth Management in Westbury. “Look what a dozen eggs cost today.”

D’Andrea said the likelihood of those enhanced benefits going out to recipients anytime soon is slim given the complexities of determining how much each recipient should receive.

Policy experts, however, said the Fairness Act accelerates the looming insolvency of the nation’s Social Security program.

“The cost of this is going to be something close to a couple hundred billion dollars over 10 years, or close to it,” said Richard Himelfarb, a Hofstra professor and expert on the politics of Social Security.

The Congressional Budget Office estimates that the Fairness Act would increase Social Security trust fund spending by about $196 billion between fiscal years 2024 and 2034. As a result, the CBO estimates that the insolvency of Social Security — projected to occur by 2034 — will occur six months earlier.

“If we do nothing about Social Security, in 2033 benefits are going to be reduced across the board by 21%,” he said.

About the COLA adjustment for Social Security recipients, Himelfarb said the increase is “a small amount.”

“If you get $1,000, it amounts to about $25 a month,” he said. “It doesn’t go very far.”

Those looking to apply for retirement benefits can visit the Social Security Administration’s website for more details on application requirements.

With AP