The Social Security Administration (SSA) has announced a 2.5% cost-of-living adjustment (COLA) for Social Security and Supplemental Security Income (SSI) benefits in 2025. This increase will impact over 72.5 million Americans, helping them manage expenses as inflation continues to stabilize.

Changes Social Security for 2025

• Social Security Benefits: Nearly 68 million beneficiaries will see the COLA reflected in their payments starting in January 2025, translating to an average increase of about $50 per month for retirees.
• SSI Payments: The adjustment for approximately 7.5 million SSI recipients will take effect on December 31, 2024.
• Combined Benefits: Some individuals who qualify for both Social Security and SSI will see the increase across both payments.

“This increase reflects our commitment to helping millions of Americans maintain their standard of living,” said Martin O’Malley, Commissioner of Social Security. “Even as inflation cools, this adjustment ensures beneficiaries can keep up with rising costs.”

Comparing COLA Over the Years

The 2025 COLA (2.5%) aligns with the 10-year average of 2.6%. This is slightly lower than the 3.2% adjustment in 2024, reflecting slower inflation growth.

Additional Adjustments for 2025

Several other updates tied to average wage increases will also take effect in January 2025:

• Taxable Maximum Earnings: The maximum income subject to Social Security tax will rise from $168,600 to $176,100.
• Earnings Limit for Early Retirement: Workers below full retirement age will see their earnings limit increase to $23,400, with $1 deducted from benefits for every $2 earned over this threshold.
• Earnings Limit for Full Retirement Age: For those reaching full retirement age in 2025, the limit will increase to $62,160, with $1 deducted for every $3 earned over the limit until the month they turn full retirement age.
• No Earnings Limit: There are no restrictions on earnings for individuals who have already reached full retirement age.

How to Access Your Updated Benefit Information

The SSA will begin notifying beneficiaries of their updated benefit amounts by mail in early December. For the first time, recipients will receive a redesigned, one-page COLA notice with personalized details, including:

• Exact benefit amounts.
• Dates for the updated payments.
• Clear information on any deductions.

Beneficiaries with a my Social Security account can access their COLA notices online earlier than by mail. These secure, personalized notices will be available starting in late November. Setting up text or email alerts will notify users when their COLA notice is ready. To access this feature, individuals must create a my Social Security account by November 20, 2024 at www.ssa.gov/myaccount.

Medicare and Additional Resources

Changes to Medicare for 2025 will be announced at www.medicare.gov. For beneficiaries enrolled in Medicare, updated Social Security benefit amounts will be available through the my Social Security Message Center starting in late November.

How COLA is Calculated

The annual COLA is determined by the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as measured by the Department of Labor’s Bureau of Labor Statistics. This ensures that adjustments are based on actual changes in living costs.

For more details on COLA and other benefit adjustments, visit the official Social Security

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