In 2025, Social Security recipients, including retirees, SSDI, and SSI beneficiaries, will see their payments increase by 2.5% due to the annual Cost-of-Living Adjustment (COLA).
While this may sound like a positive development, many recipients feel the boost is smaller than expected, particularly compared to previous COLA increases.
With inflation still affecting the cost of essential goods, many people feel the modest 2.5% increase may not be enough to cover rising expenses.
How Much Will Payments Increase?
The COLA increase translates to different dollar amounts depending on the type of benefit you receive. Retirees, for example, will see an average monthly boost of $50, bringing their payments to about $1,970 in 2025.
This is a slight increase over the 2024 COLA, which was 3.2%. Many retirees already felt the 2024 adjustment wasn’t sufficient, and the 2025 increase is even smaller.
Other beneficiaries, such as those receiving Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), will also see increases, although these will vary depending on individual circumstances. For example:
- SSDI recipients: Their average monthly payment will increase to $1,577.
- SSI recipients: Their maximum monthly payment will rise from $943 in 2024 to $966 in 2025.
Although every bit helps, these figures represent a relatively modest boost, especially given the fact that average COLA increases typically hover around 2.6%.
How Many People Will Be Affected by the COLA?
More than 72.5 million Americans are impacted by the 2025 COLA increase. This includes the following groups:
- Retirees: Approximately 68 million retirees rely on Social Security, and they will see their payments go up by 2.5%.
- SSI Recipients: Around 7.5 million Americans depend on SSI, which provides financial assistance to low-income individuals, people with disabilities, and seniors over 65. They will also receive the 2.5% increase in their payments.
- SSDI Recipients: These individuals, who have disabilities that prevent them from working, will similarly benefit from the COLA boost.
While COLA helps to adjust Social Security payments to match inflation, it’s clear that the 2025 increase falls below both the average COLA rate and the 2024 adjustment, which was higher at 3.2%.
Other Social Security Adjustments in 2025
Aside from the 2.5% COLA, another important adjustment for 2025 relates to the taxable maximum income, which will increase.
The taxable maximum is the cap on earnings subject to Social Security taxes, and it will rise from $168,600 in 2024 to $176,100 in 2025 — a 4.45% increase.
This adjustment means that higher earners will pay Social Security taxes on up to $176,100 of their income in 2025. Any income earned beyond this limit will not be taxed for Social Security purposes.
For individuals who have earned at or near this maximum for 35 years, the result could be a larger Social Security payment if they choose to file at age 70, when delayed retirement credits provide the maximum benefit.
Summary of Key Adjustments for 2025
| Category | 2024 | 2025 | Increase |
|---|---|---|---|
| COLA | 3.2% | 2.5% | -0.7% |
| Retirees (avg. payment) | $1,920 | $1,970 | $50 |
| SSDI (avg. payment) | $1,540 | $1,577 | $37 |
| SSI (max payment) | $943 | $966 | $23 |
| Taxable Maximum | $168,600 | $176,100 | $7,500 increase |
How to Track Your COLA Notice
To stay updated on how much your benefits will be in 2025, the Social Security Administration (SSA) will send out notices to all recipients.
You can also check the COLA adjustment online by setting up a my Social Security account. This account allows you to review your payment amounts, check for updates, and manage your benefits easily from home.
While the 2.5% COLA increase for 2025 will offer some relief to retirees, SSDI, and SSI beneficiaries, many feel it falls short of addressing the rising cost of living.
With inflation continuing to impact essential expenses like food, housing, and healthcare, recipients may find it challenging to make ends meet even with this boost.
It’s important to stay informed about future adjustments, such as the taxable maximum increase, to plan your finances accordingly. Keep an eye on your my Social Security account for details on your 2025 payment amounts and any other changes that may affect your benefits.
FAQs
How much will Social Security increase by in 2025?
Social Security payments will increase by 2.5% in 2025 due to COLA.
What is the average increase for retirees?
Retirees will receive an average increase of $50, bringing their monthly payments to $1,970.
Will SSI payments increase in 2025?
Yes, SSI recipients will see their maximum payment rise to $966 in 2025.
What is the new taxable maximum in 2025?
The taxable maximum will increase to $176,100, up from $168,600 in 2024.
How can I check my new benefit amount for 2025?
You can check your 2025 benefit amount via your my Social Security account online.
