In 2025, Social Security benefits and Supplemental Security Income (SSI) benefits will increase by 2.5% for more than 72.5 million Americans. Social Security retirement benefits will rise by an average of $50 per month starting in January. Almost 68 million Social Security beneficiaries will see a 2.5% cost-of-living adjustment (COLA) in January, while increased payments to approximately 7.5 million SSI recipients will begin in December 2024. Social Security Commissioner Martin O’Malley stated that these increases will help millions of people keep up with expenses even as inflation cools. Benefits can reach as high as $4,018 per month, which is the maximum Social Security benefit for a worker retiring at full retirement age.
Social Security benefits are based on taxes collected during your working life. Wage earners pay Social Security and Medicare taxes through FICA, while self-employed individuals pay SECA taxes. For 2025, the wage cap for Social Security taxes is $176,100, meaning income beyond this amount is not subject to Social Security taxes. Individuals need to demonstrate an earnings history to qualify for Social Security retirement benefits, with most workers needing 40 credits or about ten years of work. Earnings limits in 2025 for workers below full retirement age are $23,400 annually or $1,950 per month. Workers reaching full retirement age in 2025 have a higher earnings limit of $62,160 annually or $5,180 per month.
Current beneficiaries will receive notices with their new 2025 benefit amounts in early December, and they must have a personal Social Security account by November 20, 2024, to view their COLA notice online. SSI benefits, which provide monthly cash assistance to those with limited income and resources who are older, blind, or disabled, also have specific income and resources tests that applicants must meet. The federal benefit rate in 2024 is $943 per month for individuals and $1,415 for couples, with resources limited to $2,000 or less for individuals and $3,000 or less for couples. Some states add a supplement to SSI benefits, while SSI benefits are not taxable at the federal level.
Social Security benefit increases are tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) as determined by the Bureau of Labor Statistics. Over the last decade, the COLA increase has averaged around 2.6%, with a 3.2% increase in 2024. Information about Medicare changes for 2025 will be available at www.medicare.gov, and those with an online my Social Security account will receive notifications in their inbox about new rates in late November. Overall, these increases in Social Security and SSI benefits in 2025 aim to help millions of Americans maintain financial stability and keep up with the cost of living.
