Each year, Social Security benefits are adjusted to help recipients keep pace with inflation.
The Social Security increase for 2025 is based on the cost-of-living adjustment (COLA).
In 2025, the increase is modest but meaningful for millions of Americans.
What is the 2025 COLA and how much will benefits increase?
For 2025, the COLA is 2.5 %. That means Social Security retirement, disability, and survivor benefits will increase by 2.5 % starting in January 2025.
On average, retirement benefits will go up by about $50 per month.
When does the increase take effect and how is it delivered?
The 2025 increase begins with benefits paid in January 2025.
For people receiving SSI, the increased amount applies with the December 31, 2024, payment, which feeds into January’s monthly amount.
Beneficiaries will get COLA notices mailed in December 2024, or they can view the notice via their my Social Security account if it’s set up early enough.
What are the changes to tax and earnings thresholds in 2025?
Along with the benefit increase, several related rates and limits change:
- The maximum earnings subject to Social Security tax (OASDI) rises from $168,600 in 2024 to $176,100 in 2025.
- The employee plus employer combined rate remains 7.65 % (which includes Medicare).
- The earnings test thresholds increase: If you are under full retirement age, you can earn up to $23,400 before benefit withholding starts. In the year you reach full retirement age, the limit is $62,160.
Above those amounts, the SSA temporarily withholds benefits ($1 in benefits withheld for each $2 earned over the limit, or $1 for $3 in the year you reach full retirement age).
What is the new average and SSI payment amounts?
Because of the 2.5 % increase:
- The average monthly Social Security benefit for retired workers is estimated to rise to about $1,976 in 2025 (from around $1,927 in 2024).
- For SSI (Supplemental Security Income), the federal maximums in 2025 will be: $967 for an eligible individual, $1,450 for a couple, and $484 for an essential person.
These SSI amounts are before adjustments for individual income or state supplements.
How do deductions like Medicare premiums affect your net increase?
Though your benefit increases by 2.5 %, the net gain may be less after deductions:
- Medicare Part B premiums may go up for 2025; those are deducted from your Social Security check.
- If you pay income taxes on your Social Security, that also cuts into the increase.
- For those in higher income brackets, IRMAA (Income-Related Monthly Adjustment Amount) for Medicare could rise, further reducing your net benefit.
Thus, the $50 average is a gross increase before those deductions.
What should you do to check your new benefit and prepare?
Here are practical steps:
- Log into your My Social Security account in early December to view your COLA notice or expected new benefit.
- Check your mailed COLA notice in December if you are not set up online.
- Review your tax and Medicare status, so you know how much of the increase you will actually keep.
- Budget based on net increases, not gross, especially if your deductions will rise.
- Monitor any changes in COLA or related rules in future years that may affect your benefit trajectory.
