Social Security announces COLA increase for 2025: see how much more you will receive

The Social Security Administration announced the cost of living adjustment for 2025.

About 72.5 million beneficiaries — 69 million Social Security beneficiaries and 7.5 million SSI beneficiaries and some who receive both — will receive a 2.5% increase in benefits next year. Social Security beneficiaries will see an increase in January payments; The first highest SSI payment will be on December 31, 2024.

“Social Security benefits and SSI payments will increase in 2025, helping tens of millions of people keep up with expenses, even as inflation begins to cool,” Social Security Commissioner Martin O’Malley said in a statement.

The increase is lower than the 3.2% received by beneficiaries in 2024, but is close to the historical norm of 2.6% received over the past 20 years. During this period, COLAS varied between 0 in 2010, 2011 and 2016 and 8.7% in 2023.

The 2.5% increase means the average beneficiary earning $1,870 per month will see an increase of about $46.80 next year.

More changes

• The maximum amount of income subject to Social Security tax, known as the taxable maximum, will increase to $176,100.
• The earnings limit for workers under full retirement age increases to $23,400. $1 in benefits will be deducted for every $2 earned over $23,400.
• The earnings limit for people reaching full retirement age in 2025 will increase to $61,160. $1 in benefits is deducted for every $3 above $62,160 until the month the worker reaches full retirement age.
• There is no earnings limit for workers of full retirement age or older year-round.

You can see full retirement age information here.

COLAs, designed to prevent benefits from being eroded by inflation, are determined by data from the Consumer Price Index for Urban Wage Earners and Office Workers, which tracks the average price of a basket of goods. The average IPC-W of the third quarter – July, August and September – of the previous year is compared with the same period of the current year, resulting in the difference in the COLA.