The Social Security increase refers to the rise in benefit payments due to the cost-of-living adjustment (COLA).
The Social Security Administration (SSA) has set the Social Security increase at 2.5 percent.
This article explains how the Social Security increase 2025 works, when it begins, who benefits, and what other changes accompany it.
What is the Social Security increase?
The Social Security increase is the annual cost-of-living adjustment (COLA) applied to Social Security and Supplemental Security Income (SSI) benefits to guard against inflation.
The SSA uses this automatic adjustment to ensure benefits do not lose purchasing power as prices rise. In 2025, that increase is 2.5 percent.
How was the Social Security increase 2025 determined?
The Social Security increase 2025 was calculated by comparing the average Consumer Price Index for Urban Wage Earners (CPI-W) during the third quarter of 2024 (July, August, September) to that of the third quarter of 2023.
Because the CPI-W rose by roughly 2.5 percent over that period, the COLA was set at 2.5 percent (rounded to the nearest tenth).
When does the Social Security increase 2025 take effect?
The Social Security increase 2025 for Social Security benefits becomes effective with payments made in January 2025.
For SSI recipients, the increase starts with the December 31, 2024 payment.
How much will my benefits increase under the Social Security increase 2025?
The Social Security increase 2025 of 2.5 percent will raise the average retirement benefit from about $1,927 to $1,976 per month.
That means a gain of roughly $49 per month for the average retired worker.
For SSI, the maximum federal monthly payment for an eligible individual increases to $967.
Who is covered by the Social Security increase 2025?
Everyone receiving Social Security benefits or SSI is eligible for the Social Security increase 2025.
This includes retirees, people with disabilities, survivors, and SSI recipients. Beneficiaries do not need to apply, it’s automatic.
What other changes accompany the Social Security increase 2025?
Along with the Social Security increase 2025, other limits and thresholds are adjusted:
- The maximum earnings subject to Social Security tax (taxable maximum) rises to $176,100.
- The earnings limit for workers younger than full retirement age increases to $23,400.
- For those reaching full retirement age in 2025, the earnings limit is $62,160.
- The maximum Social Security benefit for a worker retiring at full retirement age jumps to $4,018 per month.
Also, the Social Security Fairness Act, passed in January 2025, repealed the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP), which had reduced benefits for people with pensions from non-covered work.
Could future Social Security increases differ due to proposed changes?
Yes. Starting in December 2026, proposals may modify how the COLA is calculated or reduce it.
One proposal would reduce the annual COLA by 1 percentage point (but not below zero).
Another would use a “chained” CPI formula, which might slow growth.
Those changes do not impact the Social Security increase 2025, but could affect future increases if implemented.
