The Social Security Administration has announced a 2.5 percent increase in Social Security benefits and Supplemental Security Income (SSI) payments for over 72.5 million Americans in 2025. On average, Social Security retirement benefits will rise by about $50 per month, beginning in January.
This cost-of-living adjustment (COLA) reflects a moderate increase compared to the 3.2 percent rise in 2024. Over the past decade, COLA adjustments have averaged around 2.6 percent. The upcoming adjustment aims to help recipients keep pace with living expenses, despite cooling inflation.
Nearly 68 million Social Security beneficiaries will experience the 2.5 percent increase starting in January 2025. Additionally, approximately 7.5 million SSI recipients will see their payments rise starting December 31, 2024. Some individuals receive both Social Security benefits and SSI, so their adjustments will begin at different times.
“Social Security benefits and SSI payments will increase in 2025, helping tens of millions of people manage their expenses even as inflation stabilizes,” said Martin O’Malley, Commissioner of Social Security.
Key Adjustments for 2025:
- The maximum amount of earnings subject to Social Security tax will increase from $168,600 to $176,100, reflecting the rise in average wages.
When Will Beneficiaries Be Notified?
Starting in early December, Social Security beneficiaries will receive notification of their new benefit amounts by mail. This year, for the first time, the notice will feature a redesigned, simplified format, making it easier for recipients to find key information, such as exact benefit amounts and any deductions.
For those with a personal my Social Security account, the COLA notice will be available online, allowing for faster and more secure access. Beneficiaries can also opt to receive text or email alerts when a new message, such as the COLA notice, is available.
To ensure online access to the 2025 COLA notice, beneficiaries must create a my Social Security account by November 20, 2024. To get started, visit www.ssa.gov/myaccount.
Medicare Updates:
Details about Medicare changes for 2025 will be available at www.medicare.gov. For Social Security beneficiaries enrolled in Medicare, the 2025 benefit amounts, which account for any Medicare deductions, will be accessible through the my Social Security Message Center in late November. Those not receiving online notifications will receive their COLA notice by mail in December.
How is COLA Calculated?
The Social Security Act ties the annual COLA to changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as determined by the Department of Labor’s Bureau of Labor Statistics.
For more information about the COLA and related adjustments, visit www.ssa.gov/cola.
