Social Security is a dynamic program that undergoes annual upgrades and modifications. Beneficiaries should be aware of all of these changes, even though some are more evident than others, so they may make informed financial plans and steer clear of pitfalls.
Social Security benefits will get a cost-of-living adjustment (COLA) in 2025
Every year, this is the most anticipated update. In order to ensure that seniors keep their purchasing power, benefits are adjusted to account for increases in the cost of living. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the prior year (July–September) is compared to the current year to calculate the COLA. The COLA is obtained from the resulting percentage.
This comparison yields 2.5% in 2025, which will be applied to all benefits starting in January. The benefits will be shown in the table below.
| Beneficiary Type | Average Benefit (Before COLA) | Average Benefit (After COLA) | Additional Income |
| Retired workers | $1,924 | $1,972 | $48 |
| Spouses | $910 | $933 | $23 |
| Survivors | $1,509 | $1,547 | $38 |
| Disabled workers | $1,542 | $1,581 | $39 |
The maximum Social Security benefit will increase in 2025
The age-based maximum payments for Social Security vary yearly in accordance with the COLA. Your benefit will increase in size the longer you wait to claim it (until you are 70 years old). However, you must have worked for at least 35 years and earned the maximum taxable income (in 2024, this was $168,000) in order to receive any of the maximum amounts in the table below.
| Claim Age | Maximum Social Security Benefit |
| 62 | $2,831 |
| 65 | $3,374 |
| 66 | $3,795 |
| 67 | $4,043 |
| 70 | $5,108 |
The taxation of Social Security benefits will likely continue in 2025 and beyond
Contrary to popular belief, the federal government does not tax Social Security benefits. AGI, nontaxable interest, and half of Social Security benefits are all included in the beneficiaries’ total income, which is subject to taxation.
In an effort to avoid another Social Security deficit, this formula was implemented in 1984. Nonetheless, it has been years since the combined income levels that are subject to taxation were altered. Because of this, the original 10% of beneficiaries who are taxed has not gone up to 50%.
Even though Social Security benefits have risen in line with inflation, tax thresholds have not, which has resulted in more seniors having to pay taxes. Although there have been proposals to do away with Social Security taxes, such as one put up by Representative Angie Craig (D-Minn.), they are unlikely to be approved because of the program’s $22.6 trillion budget deficit through 2098.
During his campaign, even President-elect Donald Trump claimed that elderly people shouldn’t be required to pay Social Security taxes. His own party’s policies, which have thwarted all efforts to raise Social Security benefits for regular Americans, are in opposition to this.
They will only consider options that would lessen the program’s load, not ones that would strengthen it or put it under more strain, like increasing the retirement age or reducing payouts.
Significant changes are probably closer to the trust fund’s projected depletion in 2035 because Congress has a history of delaying issues until they become necessary (as was the case in the 1980s when the last shortage was fixed just one week before the program failed).
In any case, there are still thresholds that restrict how much beneficiaries can pay, even if taxes are due on some parts of the payments:
| Taxable Portion of Benefits | Single Filers | Joint Filers |
| 0% | $25,000 or less | $32,000 or less |
| 50% | $25,000 to $34,000 | $32,000 to $44,000 |
| 85% | $34,000 or more | $44,000 or more |
See Also: Millions Will See a Change in Social Security Benefits What the New Law Will Signify
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Eliot Pierce is a dedicated writer for ChiefsFocus.com, covering local crime and finance news. With a keen eye for detail and a passion for storytelling, Eliot aims to provide his readers with clear and insightful analysis, helping them navigate the complexities of their financial lives while staying informed about important local events. His commitment to delivering accurate and engaging content makes him a valuable resource for the community.