The upcoming 2025 Cost-of-Living Adjustment (COLA) for Social Security recipients offers a slight boost to benefits. However, for many retirees and beneficiaries of Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), this increase falls short of expectations. The average COLA hovers around 2.6%, and the 2025 adjustment will be lower than that, bringing disappointment to many who were hoping for more significant financial relief.
Comparison with 2024 COLA
The 2025 COLA increase for Social Security and SSI beneficiaries is modest, especially compared to the 2024 COLA of 3.2%. Even though 2024’s adjustment was higher, retirees and recipients found it insufficient to cover the rising costs of living. With inflation hitting everyday essentials like food, healthcare, and housing, a smaller increase in 2025 has left many feeling frustrated.
Who Will Receive the COLA?
Millions of Americans rely on Social Security payments each month. This includes retirees, those on SSDI, and SSI beneficiaries. Here’s a breakdown of who will be affected by the 2025 COLA:
- SSI Beneficiaries: About 7.5 million Americans currently receive SSI payments. These individuals will see a 2.5% increase in their payments. In 2024, the average SSI payment was $698, and after the COLA, it will increase to about $715 in 2025. The maximum SSI benefit will rise from $943 in 2024 to $966 in 2025.
- Social Security Recipients: There are a total of 68 million Social Security recipients, including retirees, those receiving survivor benefits, spousal benefits, and SSDI recipients. Retirees, in particular, will see an average increase of $50 in their monthly payments, bringing the average payment to $1,970 in 2025.
- SSDI Recipients: SSDI recipients will receive around $1,577 in 2025, following the COLA adjustment. This slight increase is not expected to provide much relief for those relying on these payments, but every dollar helps when balancing a tight budget.
| Beneficiaries | 2024 Average Payment | 2025 Average Payment (after COLA) |
|---|---|---|
| SSI Beneficiaries | $698 | $715 |
| Retirees | $1,920 | $1,970 |
| SSDI Recipients | $1,527 | $1,577 |
New Taxable Maximum
Another key change for 2025 is the increase in the taxable maximum, also known as the contribution and benefit base. Starting in January 2025, the taxable maximum will rise from $168,600 to $176,100, a 4.45% increase. This means higher-income earners will pay Social Security taxes on income up to $176,100, after which no further Social Security taxes are deducted.
This change affects how much high-income workers contribute and, for some, may impact their eventual Social Security benefits. To maximize benefits, individuals need to consistently earn at or above the taxable maximum for 35 years and delay filing until age 70. This strategy ensures the highest possible payout from Social Security.
Your Benefits
To ensure you receive all necessary information about your future payments, it’s essential to keep track of changes through your personal “my Social Security” account. This online tool allows you to view your COLA notice and other updates regarding your benefits.
Whether you’re a retiree, an SSDI recipient, or rely on SSI, staying informed about how these adjustments affect your monthly income can help you plan better for the coming year.
Although the 2025 COLA increase may seem small, every dollar can make a difference. With inflation continuing to be a concern, managing expenses and knowing how Social Security changes impact your financial picture are key to maintaining stability. Keep an eye on your COLA notice, and consider long-term strategies to maximize your benefits in the future.
FAQs
What is the 2025 COLA percentage?
The 2025 COLA is expected to be around 2.5%, lower than the 2024 increase.
How much will retirees get after the 2025 COLA?
Retirees will receive an average of $1,970 per month after the adjustment.
How much will SSI beneficiaries receive in 2025?
SSI recipients will get an average payment of $715, with a maximum of $966.
Will the taxable maximum increase in 2025?
Yes, the taxable maximum will rise to $176,100 in 2025.
How can I check my new Social Security payment?
You can check your updated payment by logging into your my Social Security account online.
