The Social Security Administration (SSA) uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to determine the Cost-of-Living Adjustment (COLA) each year.
For 2025, the COLA increase will be 2.5%, slightly below the average of 2.6% over the past decade. This adjustment helps Social Security benefits keep pace with inflation. Below are the main changes for 2025.
What Is the 2025 COLA Increase?
The 2025 COLA increase is 2.5%, affecting Social Security and Supplemental Security Income (SSI) benefits. This adjustment ensures benefits can cover rising costs of living.
Key Changes in Social Security for 2025
1. Taxable Income Limits
- The maximum taxable income has increased from $168,000 in 2024 to $176,100 in 2025.
- Once you earn beyond this limit, no additional Social Security taxes are deducted.
2. Work Credits
- To qualify for Social Security benefits, you need 40 work credits (about 10 years of work).
- In 2025, you must earn $1,810 to get one work credit, up from $1,730 in 2024.
3. Retirement Earnings Test Exempt Amounts
- The annual limit for those retiring before Full Retirement Age (FRA) has increased to $23,400, up from $22,320.
- For workers reaching FRA in 2025, the limit is now $62,160 per year.
4. SSI Updates
- Maximum SSI payments after COLA:
- $967 for individuals (up from $914).
- $1,450 for couples (up from $1,371).
- Resource limits remain the same: $2,000 for individuals and $3,000 for couples.
5. Disability Thresholds
- Substantial Gainful Activity (SGA):
- $1,620/month for non-blind individuals.
- $2,700/month for blind individuals (up from $2,590).
- The Trial Work Period (TWP) earnings limit is now $1,160/month.
6. Maximum Retirement Benefits
- For individuals at Full Retirement Age, the maximum monthly benefit is increasing from $3,822 in 2024 to $4,018 in 2025.
The 2025 Social Security updates aim to balance inflation and benefit increases, offering modest adjustments in payment limits, work credits, and retirement thresholds. These changes provide more clarity and financial stability for recipients while reflecting economic trends.
What is COLA, and how does it affect my benefits?
COLA (Cost-of-Living Adjustment) helps Social Security benefits keep up with inflation. For 2025, the increase is 2.5%.
What is the maximum taxable income for Social Security in 2025?
The maximum taxable income is $176,100. Income above this is not taxed for Social Security.
How much do I need to earn to get one work credit in 2025?
You need to earn $1,810 to earn one work credit in 2025, up from $1,730 in 2024.
What are the new SSI payment limits for 2025?
The maximum monthly payment is $967 for individuals and $1,450 for couples after COLA.
What is the SGA limit for disabled individuals in 2025?
The SGA limit is $1,620/month for non-blind individuals and $2,700/month for blind individuals.
