Social Security recipients will see a 2.5% cost-of-living adjustment (COLA) in 2025. This means an average increase of $50 per month for retirees. While this boost helps fight inflation, rising Medicare costs and taxes might reduce the extra income. Understanding who qualifies, how much you’ll get, and when payments arrive can help you plan your budget better. Here’s a complete guide to everything you need to know about the 2025 COLA increase.
How Much Is the Social Security COLA Increase in 2025?
In 2025, Social Security benefits will increase by 2.5%. This is lower than the 3.2% increase in 2024 and much smaller than the 8.7% increase in 2023, which was one of the highest in 40 years.
Here’s what the average monthly benefit increase will look like:
| Type of Beneficiary | 2024 Benefit | 2025 Benefit | Increase |
|---|---|---|---|
| Retired Worker | $1,926 | $1,976 | +$50 |
| Couple (Both Retired) | $3,055 | $3,129 | +$75 |
| Disabled Worker | $1,537 | $1,575 | +$38 |
| Survivors | $1,567 | $1,606 | +$39 |
| SSI Recipients | $943 | $967 | +$24 |
Who Qualifies for the 2025 COLA Increase?
Everyone receiving Social Security benefits or Supplemental Security Income (SSI) will automatically get the 2.5% increase. This includes:
- Retired workers
- People with disabilities (SSDI recipients)
- Survivors of deceased workers
- SSI recipients (low-income individuals who qualify for assistance)
When Will You Receive the Higher Payments?
Payment Schedule for Social Security Recipients
The new benefit amounts will be sent starting January 2025, based on your birth date:
- Born 1st–10th → Paid on the second Wednesday of the month
- Born 11th–20th → Paid on the third Wednesday of the month
- Born 21st–31st → Paid on the fourth Wednesday of the month
Payment Schedule for SSI Recipients
- First COLA-increased payment: December 31, 2024
- Regular SSI payments: Sent on the first of each month
How Rising Costs May Affect Your Increase
Even though benefits are increasing, other expenses may rise too:
- Medicare Part B Premiums → Expected to increase from $174.70 in 2024 to $185 in 2025
- Medicare Part B Deductibles → Likely to increase
- Taxes on Social Security → If your total income is above $25,000 (single) or $32,000 (couples), part of your benefits may be taxed
How to Maximize Your Social Security Benefits
1. Delay Claiming Benefits (If Possible)
- If you wait past full retirement age (FRA) to claim benefits, your monthly check increases by 8% per year (up to age 70).
2. Consider Spousal or Survivor Benefits
- If you are married, divorced, or widowed, you may qualify for higher benefits under your spouse’s record.
3. Be Aware of the Earnings Limit (If Working While Collecting Benefits)
- If you’re under full retirement age (FRA) and earn over $23,400 in 2025, Social Security will reduce your benefits by $1 for every $2 you earn above the limit.
- If you reach FRA in 2025, the limit increases to $62,160, and benefits are reduced by $1 for every $3 earned above the limit.
4. Plan for Taxes on Your Benefits
- If your total income exceeds $34,000 (single) or $44,000 (married), up to 85% of your Social Security benefits could be taxed.
Conclusion
The 2025 Social Security COLA increase will provide a small financial boost, with an average increase of $50 per month for retirees. While this increase helps with inflation, higher Medicare costs and taxes could offset some of the gains. By understanding the payment schedule, eligibility rules, and strategies to maximize benefits, you can better manage your finances. Planning ahead will help you make the most of your Social Security income in 2025 and beyond.
East West Hunt
FAQ’s
Will everyone on Social Security get the 2025 COLA increase?
Yes, all Social Security and SSI recipients will automatically receive the 2.5% increase in 2025.
When will I see the higher Social Security payments?
Payments will start in January 2025, based on your birth date. SSI recipients will see their first increase on December 31, 2024.
Can I get taxed on my Social Security benefits?
Yes, if your total income exceeds $25,000 (single) or $32,000 (couples), part of your benefits may be taxable.