Every year the Social Security Administration (SSA) makes an adjustment to beneficiary services. These are in response to inflation and possible price increases that may occur during the year. Today, we will emphasize the new changes in the Cost of Living Allowance (COLA) that will occur in 2025 and that will change the amounts of Social Security retirees.
It should be noted that 2024 was an economically difficult year for many families. There were price increases and lower monthly household incomes, so the COLA adjustment announced for 2025 represents great news for Social Security retirees.
COLA increase confirmed for all Social Security beneficiaries
Social Security is the largest financial assistance program in the United States. It currently has more than 70 million beneficiaries nationwide. Each citizen is eligible for a certain amount of services based on his or her income and credits accumulated during his or her active years in the labor market.
In view of the increase in inflation and the Cost of Living, which varies in each state and is an index that explains prices, government authorities decided to set an adjustment of 2.5 percent. While this is less than other years, it is equivalent to $50 for each service, a sum that would be of great help to many families.
Social Security payment schedule in January 2025
- December 31, 2024: advance payment for Supplemental Security Income (SSI) recipients.
- January 3, 2025: for those who began receiving benefits before May 1997 or combine SSI and Social Security payments.
- January 8, 2025: beneficiaries born between the 1st and 10th of the month.
- January 15, 2025: beneficiaries born between the 11th and 20th of the month.
- January 22, 2025: beneficiaries born between the 21st and 31st of each month.
Changes in Social Security earnings limits.
In addition to the increase in the amount, the Cost of Living produces changes that will directly impact SSI and Social Security beneficiaries and retirees. These changes relate to earnings limits and the maximum amount of taxable income. In addition, the requirements will be as follows:
- Maximum taxable: the maximum amount of Social Security taxable earnings will be raised to $176,100.
- Earnings limits for workers under “full” retirement age: increases to $23,400. For every $2 earned above that limit, $1 will be deducted from benefits.
- Earnings limits for workers reaching “full” retirement age in 2025: increases to $61,600. For every $3 earned, $1 will be deducted from benefits until the month “full” retirement age is reached.
- No earnings limits: for those who have already reached “full” retirement age or are older throughout the year, there will be no earnings restriction.
How the Social Security increase impacts on retirees
The Cost of Living Adjustment seeks to offset the impact of inflation. In this way, it ensures that beneficiaries do not lose purchasing power in the midst of the complicated economic environment the United States is currently facing. And while the 2025 COLA increase, set at 2.5%, may seem modest, it represents relief for millions of retirees and people with disabilities who rely on these Social Security payments for basic household needs.
