Social Security benefits to increase in 2025

Social Security will see several changes in 2025 that will impact the nearly 73 million Americans who rely on the program. The Social Security Administration (SSA) will issue a 2.5% cost-of-living adjustment (COLA) to help beneficiaries cope with rising prices. This means the average monthly benefit payment will increase, though the exact amount varies. The maximum benefit recipients can receive will also go up. At the age of eligibility, it will be $2,831, up from $2,710. For those at full retirement age, it will be $4,018, up from $3,822. And for those at the age when the SSA stops issuing delayed-retirement credits, it will be $5,108, up from $4,873. SSI recipients will see a boost as well. In 2025, the maximum SSI benefit will rise to $967 for individuals and $1,450 for couples, up from $943 and $1,415, respectively. However, more income will be subject to Social Security tax in 2025.

Social Security adjustments impact 2025 benefits

The SSA adjusts the maximum amount of income eligible for taxation each year to help fund the program. There is some good news for early retirees. Those who claim Social Security before their full retirement age can earn more income in 2025 without seeing their benefits reduced. The earnings limit before reductions will be raised from $22,320 to $23,400. After that, the SSA deducts $1 of benefits for every $2 earned. For those reaching full retirement age in 2025, the limit is $62,160. Beyond that, the SSA deducts $1 for every $3 earned. Once beneficiaries reach their full retirement age, there is no reduction. These changes aim to ensure Social Security keeps up with inflation and provides relief to those who depend on it. Beneficiaries should stay informed to understand how these adjustments will impact their finances in the coming year.