Social Security services are always changing, and everyone who gets benefits needs to know about them. All of the programs are being changed.
It does not matter if you are just thinking about applying or if you are already getting your monthly payment. No matter what, the changes will have an effect on you.
How will Social Security be affected by COLA?
This could be seen as one of the most important changes the Social Security Administration has made this year. Since July, people have said it would happen, and soon everyone will know the number.
We are talking about the COLA adjustment, which is a number that is based on the average difference between the CPI-W for this year and last year for wage earners and clerical workers in cities.
2.5% has been chosen as the COLA change for 2025. It might not seem important, but it is important to remember that it shows how inflation has changed over the past year.
Because of this, your money will not lose as much of its value as it did in the past during economic crises like COVID. Not only will your Social Security checks go up by that much, but other values used in the different Social Security systems will also go up, like
- Substantial Gainful Activity limits for the Disability Insurance program.
- Supplemental Security Income Resource Limits and Student Exclusion Limits.
- Disability and Supplemental Security Income amounts.
In its 2025 fact sheet, the government agency lists the following average amounts with COLA for the amounts paid:
| Average Monthly Social Security Benefit | 2024 | 2025 |
| Single Retired | $1,927 | $1,976 |
| Couple Retired | $3,014 | $3,089 |
| Survivor with Two Children | $3,669 | $3,761 |
| Survivor Alone | $1,788 | $1,832 |
| Single Disabled | $1,542 | $1,580 |
How much of your earnings will be taxable to your Social Security?
If you want to be covered by Social Security when you retire, you have to pay taxes into the program. You are responsible for the whole 12.4% cost if you are self-employed. If you are an employee, it will be 6.2%, and your boss will pay the other 6.2%.
However, this amount is limited every year. Any extra money you make is not taxed, but it will not help you save for retirement. The highest amount of money that is taxed right now is $168,600, but next year it will go up by $7,500 to $176,100.
What will be the value of the maximum Social Security benefit?
Your highest Social Security benefit will go up, which is another change. This one is based on how much you have paid in Social Security taxes over the years.
If you have made more than the highest taxable income for at least 35 years, you are good to go. The most you can get now is $3,822, but next year it will be $4,873, and if you are retired or plan to retire in 2025, you can get an extra $1,051.
Is Social Security going to penalize you?
It depends, but it will be something to think about in 2025. Different people can retire at different ages under Social Security. However, you (and your finances) decide when to quit.
The earlier you leave, the more likely it is that your benefits will be cut. This time span starts at age 62, which is called the Normal Retirement Age, and ends at age 70, which is called the Full Retirement Age (FRA).
With FRA, you will get 100% of your highest possible income based on how much you paid into Social Security over your lifetime.
Some retired people have found that they can use their skills to make extra money on top of their monthly Social Security payments once they are no longer working and have become NRA members.
If that happens, the SSA will hold back some of their benefits, $1 for every $2 in income, until they reach FRA. This is called the Retirement Earnings Test.
The amount of income that is also withheld is limited, and it depends on whether you will hit FRA this year or later.
| Retiree Status | 2024 | 2025 |
| Achieves FRA this year | $59,520 | $62,160 |
| Achieves FRA after this year | $22,320 | $23,400 |
Also see:-Social Security Announces Changes to SSI Payments – 3 Payments Remain in 2024, 1 Surprise
