Social Security benefits and Supplemental Security Income (SSI) payments for more than 72.5 million Americans will see a 2.5% increase in 2025, according to the Social Security Administration. This adjustment is aimed at helping beneficiaries keep up with rising expenses, especially as inflation has started to cool. On average, Social Security retirement benefits will rise by about $50 per month starting in January.
Over the past decade, the cost-of-living adjustment (COLA) increase has averaged around 2.6%. In 2024, the COLA was 3.2%, showing a slight decrease compared to the upcoming 2.5% increase in 2025. Nearly 68 million Social Security beneficiaries will experience the 2.5% COLA beginning in January 2025, while increased payments to almost 7.5 million individuals receiving SSI will start on December 31, 2024. It’s important to note that some people receive both Social Security benefits and SSI.
Martin O’Malley, Commissioner of Social Security, stated, “Social Security benefits and SSI payments will increase in 2025, helping tens of millions of people keep up with expenses even as inflation has started to cool.” This adjustment aims to provide financial relief to beneficiaries who rely on these payments for their livelihood.
In addition to the COLA increase, other adjustments based on the rise in average wages will also take effect in January. The maximum amount of earnings subject to the Social Security tax (taxable maximum) is set to increase to $176,100 from $168,600. These changes are part of the annual adjustments made by the Social Security Administration to ensure that beneficiaries receive adequate support.
Social Security will begin notifying individuals about their new benefit amount by mail starting in early December. This year, beneficiaries will receive a newly designed and improved COLA notice that is easier to understand and provides essential information in a clear and concise manner. The simplified COLA notice is now only one page, uses plain and personalized language, and includes exact dates and dollar amounts of the new benefit amount and any deductions.
For the first time, Social Security beneficiaries can view their COLA notice online through their personal my Social Security account. This online platform offers a secure, easy, and faster way to access important information. Individuals can set up text or email alerts to receive notifications when there is a new message, such as their COLA notice, waiting for them in their my Social Security account.
To view their COLA notice online, individuals must have a personal my Social Security account by Nov. 20. Those who have not created an account yet can visit www.ssa.gov/myaccount to get started. Information about Medicare changes for 2025 will also be available on www.medicare.gov. Social Security beneficiaries enrolled in Medicare can access their 2025 benefit amount through my Social Security’s Message Center starting in late November.
The calculation of the COLA is determined by the Social Security Act, which ties the annual adjustment to the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) as reported by the Department of Labor’s Bureau of Labor Statistics. For more information on the COLA calculation and updates, individuals can visit www.ssa.gov/cola.
In conclusion, the 2.5% increase in Social Security benefits and SSI payments for 2025 is a welcome relief for millions of Americans who rely on these funds for their financial security. The annual adjustments made by the Social Security Administration aim to ensure that beneficiaries can keep up with the cost of living and maintain their standard of living. By providing clear and accessible information through online platforms and improved notices, Social Security is working to make the process easier for beneficiaries to understand and manage their benefits effectively.
