All Social Security recipients in the country will have to pay more next year because of the new cost of living adjustment (COLA). This was confirmed by the Social Security Administration.
Even though the percentage is lower than expected for millions of US beneficiaries, the 2.5% COLA increase will still help millions of retirees, survivors, disabled people, and people who get Supplemental Security Income (SSI) pay their bills and get by each month.
Aside from the new cost of living adjustment, beneficiaries will also have to deal with some other important changes starting in January 2025.
Social Security has confirmed 5 new changes that will impact beneficiaries in the US
The new COLA for 2025 was officially set at 2.5%
The cost of living adjustment (COLA) that seniors got at the start of 2024 was 3.2%, which is a lot more than the 2.5% COLA that Social Security said it would give in 2025. But it is very important to give that COLA some background.
Because inflation slowed down a lot in 2024, the COLA for 2025 is lower. Seniors who get Social Security may already be feeling some relief because costs are not going up as fast as they did in the past few years.
As of January 2025, people who get Social Security will get the following amounts thanks to this annual increase:
| Retirement benefits (Plus 2.5%) | Survivor benefits (Plus 2.5%) | SSDI benefits (Plus 2.5%) | SSI benefits (Plus 2.5%) |
| On average: $1,948 Advertisement
Age 62: $2,778 Age 67: $3,918 Advertisement
Age 70: $4,995 |
On average: $1,543
Individual: $1,817 Advertisement
2 Children: $3,744 |
On average: $1,575
Blind recipients: $2,655 Advertisement
Maximum payment: $3,918 |
On average: $715
Individuals: $967 Advertisement
Couples: $1,450 Essential person: $484 |
The earnings test limit will increase for some beneficiaries
A common misconception is that once you start getting Social Security benefits, you can not work anymore. In reality, you can work and get Social Security benefits at the same time.
But you need to know about the program’s limits on earnings if you do that before you reach full retirement age.
There is an earnings-test limit that tells you how much money you can make from work before you risk having some of your Social Security benefits taken away.
The most you could earn before the earnings test in 2024 was $22,320. In 2025, it will be $23,400. You could have $1 taken out of your pay for Social Security for every $2 you make after that.
Keep in mind that if you plan to retire at full age in 2025, your earnings-test amount will be higher. In this case, it will go up from $59,520 in 2024 to $62,160.
Now, for every $3 you earn after that, there is a chance that $1 will be taken away. But remember that these numbers do not matter if you are still working or if you have already reached full retirement age. They will not change how much Social Security you get.
The payroll tax limit will also increase
When you work, you pay taxes that go to Social Security. The most that people can earn before they are taxed to pay for the program is set every year.
The most you can get from Social Security went up from $168,600 to $176,100 between 2024 and 2025. The only thing that has changed is that earnings have gone up.
Social Security recipients will need to pay more per working credit
To get Social Security benefits when you retire, you have to pay into the program and earn 40 work credits over your lifetime, or up to four credits per year. One work credit, for example, will go up from $1,730 in 2024 to $1,810 in 2025.
This is something you should know if you work part-time and want to eventually get Social Security.
As long as you work full-time, this change probably will not affect you. Even at minimum wage, you should be able to make enough money to get your four credits for the year.
Beneficiaries will receive a higher maximum benefit
The maximum monthly benefit for Social Security is also limited by the maximum amount of money that can be taxed under the program. The most you can get when you reach full retirement age will go up from $3,822 in 2024 to $4,018 in 2025.
It is still possible to get a monthly payment that is more than the maximum benefit. If you wait to claim Social Security until after your full retirement age, your payment will go up by 8% every year until you reach age 70.
There is a lot going on with Social Security in 2019. It is important to know about these changes whether you get benefits or not.
