The Social Security Administration adjusted the COLA for the 2025 year, increasing the payments for the various benefits recipients. Citizens whose finances depend on Social Security payouts can check the 2025 Social Security payouts to manage their monthly expenses well.
2025 Social Security Increase
The SSA adjusts the Cost-of-Living-Adjustments every year to ensure the Social Security payouts to the eligible citizens are enough for them to survive the inflation. Every year the administration calculates the COLA by comparing the average CPI-W of the third quarter of the tax year and the prior year’s third quarter.
If in comparison, the percentage changes with 0.1%, the Social Security increases with the obtained COLA. This year, the administration has calculated the COLA for 2025 and announced it on 10 October 2024. As per the announcement, the 2025 Social Security payments will increase by 2.5% COLA.
The government estimates around 72.5 million citizens will receive the Social Security benefit in 2025. Though the 2025 COLA increase is the lowest increase since 2021, the recipients can expect an increase of at least $50 in their payments from January 2025.
Social Security Payouts in 2025
With 2025 COLA announcements, many Social Security recipients must be wondering about their upcoming payouts under the various Social Security benefits applicable to them. The recipients can check their increased 2025 Social Security payouts from below based on the benefit they qualify for and other conditions:
- Retirement Benefits:
- The average retirement benefit for retirees will hike to $1948 with a 2.5% COLA increase from $1900 monthly benefits in 2024.
- People who are age 62 and receive retirement benefits can expect their payment to rise to $2,778 from $2710 in 2024.
- People who have attained the age of 67 can receive Social Security retirement benefits up to $3918 from $3822 in 2024
- People who have attained the full retirement age can expect their retirement benefits up to $4018 per month from $3822 in 2024.
- The aged couple where both receive the benefits can expect the maximum benefit of up to $3089 from $3014.
- Survivor Benefit:
- The widowed with two children will receive a maximum payout of around $3761 in 2025 from $3669.
- The aged widow or widower living alone can receive the maximum payout of $1832 from 2025 from $1788.
- Disability Benefit:
- The disabled workers qualifying for the disability benefit can expect to receive a maximum payout of $1580 in 2025 from the $1542 2024 amount based on their disability and other conditions applicable to payments.
- People with disabilities who have a spouse or dependent children can expect a rise of $2826 in 2025 from an earlier benefit of $2757 based on their number of dependent children.
- Supplemental Security Income:
- The SSI recipients qualifying for individual benefits will receive a maximum monthly amount of $967 in 2025 from $943.
- Couples qualifying for the SSI will receive the maximum 2025 payment of $1450 per month from $1415.
When will you receive the 2025 Social Security increase?
The Social Security 2025 COLA increase will be effective on payments from January 2025, however, some of the January payments that will be processed on 31 December 2024 due to the New Year’s holiday can expect the increased payment into their account earlier. The SSI payments are processed on the first day of the month, so the SSI recipients can expect the increased 2025 payouts early.
The administration will send a COLA notice to the Social Security recipient to inform them about their payment increase and how much they will receive from January 2025. The administration will send the notices in December 2024.
The recipients can also check the COLa notice online via my Social Security account, to get all the information about the increased Social Security in 2025.
Changes in the 2025 Social Security Income threshold
With the increase in Social Security payout via COLA, the administration has increased the income threshold or limit for the Social Security payroll tax. The US people associated with Social Security via contributions or as recipients can check the changes in the income limit and other payout income limits below:
- An important change occurred in the Social Security payroll tax because the earning income limit subjected to payroll taxes was hiked from $168,600 to $176,100.
- The retirees who are under the full retirement age (66 and 10 months) in 2025 income limit is $23,400 a year ($1950 a month) to receive the retirement benefits otherwise every $2 earning increase the limit will be withheld $1 payout.
- Retirees who have reached the full retirement age in 2025 can earn up to $62,160 annually ( $5180 a month) to receive the retirement benefit above the limit your payout will be affected.
- The Non-blind disability benefit recipients’ monthly income limit for 2025 is increased to $1620 from $1550.
- The Blind disability benefit recipients’ monthly income limit for 2025 is increased to $27,00 from $2590.
- The disability recipients receiving payout under the Trial Work Period monthly income limit is hiked to $1,160 from $1,110.
- The SSI recipient’s resource limit to receive the payout is the same $2000 (individuals) and $3000 (couples).
- The SSI student exclusion monthly limit has increased from $2350 to $2290.
Will the new Social Security rates from 2025 push you into a tax cap?
Social Security recipients whose annual earnings including their earnings and Social Security benefit payout goes above the taxable income will pay taxes. According to the Social Security estimates, around 40% of Social Security recipients pay taxes on their benefits.
This happens when you have other taxable income, such as self-employment earnings, dividends, wages, etc. As we have mentioned above the taxable earnings tax on payroll tax is increased to $176,100 for 2025, the government has announced that Social Security benefits will be taxed in the same manner as private pension income.
So, the recipients should be mindful of their total taxable income, such as if your combined income is between $25,000 and $34,000, 50% of the benefit will be taxed, and if it is more than $44,000, 85% of the benefit will be taxed for individuals.
The Social Security payout will be increased based on the 2025 COLA increase from January 2025, the SSI recipients will receive the 2025 increase early due to the New Year holiday, so do check the maximum amount to plan your finances well.
