The Social Security Administration (SSA) has said that Social Security and Supplemental Security Income (SSI) benefits will go up by 2.5% in 2025 because of the cost of living.
Over 72.5 million Americans will be affected by this increase, which will help them budget their money as inflation stays stable.
Changes Social Security for 2025
- Social Security Benefits: Nearly 68 million beneficiaries will see the COLA reflected in their payments starting in January 2025, translating to an average increase of about $50 per month for retirees.
- SSI Payments: The adjustment for approximately 7.5 million SSI recipients will take effect on December 31, 2024.
- Combined Benefits: Some individuals who qualify for both Social Security and SSI will see the increase across both payments.
Commissioner of Social Security Martin O’Malley said, “This increase shows our commitment to helping millions of Americans keep up their standard of living.” “This change makes sure that beneficiaries can keep up with rising costs even if inflation slows down.”
Comparing COLA Over the Years
The 2.5% COLA in 2025 is the same as the average of 2.6% over the last 10 years. This is a little less than the 3.2% change that was made in 2024, which shows that inflation is growing less quickly.
Additional Adjustments for 2025
Several other changes related to rising wages will also happen in January 2025:
- Taxable Maximum Earnings: The maximum income subject to Social Security tax will rise from $168,600 to $176,100.
- Earnings Limit for Early Retirement: Workers below full retirement age will see their earnings limit increase to $23,400, with $1 deducted from benefits for every $2 earned over this threshold.
- Earnings Limit for Full Retirement Age: For those reaching full retirement age in 2025, the limit will increase to $62,160, with $1 deducted for every $3 earned over the limit until the month they turn full retirement age.
- No Earnings Limit: There are no restrictions on earnings for individuals who have already reached full retirement age.
How to Access Your Updated Benefit Information
Beneficiaries will start getting mail from the SSA in early December telling them about their new benefit amounts. People will get a redesigned, one-page COLA notice with personalized information for the first time. It will include:
- Exact benefit amounts.
- Dates for the updated payments.
- Clear information on any deductions.
People who get Social Security benefits and have a “my Social Security” account can see their COLA notices online before they get mailed.
Starting in late November, you will be able to get these safe, personalized notices. Users will know when their COLA notice is ready if they set up text or email alerts.
People must make a my Social Security account at www.ssa.gov/myaccount by November 20, 2024, in order to use this feature.
Medicare and Additional Resources
At www.medicare.gov, changes to Medicare for 2025 will be made public. Starting in late November, beneficiaries who are on Medicare will be able to get their updated Social Security benefit amounts through the my Social Security Message Center.
How COLA is Calculated
As measured by the Bureau of Labor Statistics for the Department of Labor, the annual COLA is based on the rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
This makes sure that changes are made based on real changes in the cost of living.
Visit the official Social Security website to learn more about COLA and other changes to benefits.