Social Security Benefits and Taxable Earnings to See Key Changes in 2025

The Social Security Administration (SSA) has announced several significant changes for 2025 that will impact millions of beneficiaries. One of the most notable changes is the 2.5% cost-of-living adjustment (COLA) for Social Security benefits and Supplemental Security Income (SSI) payments. This increase, effective in January 2025, will add approximately $50 to the average retiree’s monthly check, bringing the average monthly retirement benefit from $1,927 to $1,976[4][5].

The taxable wage base, which is the maximum amount of earnings subject to Social Security taxes, will increase from $168,600 to $176,100 starting January 1, 2025. This adjustment reflects the growth in national average wages and means that higher-income workers will see more of their earnings subject to Social Security taxes[1][3].

In addition to the COLA, the maximum monthly Social Security benefit for those reaching full retirement age in 2025 will rise from $3,822 to $4,018. This change benefits individuals who delay retirement until age 67, the full retirement age for those born after 1960.

Other adjustments include increases in benefits for specific groups, such as widowed parents with two children, whose monthly support will increase from $3,669 to $3,761, and widows and widowers living alone, who will see their benefits rise from $1,788 to $1,832. Disabled workers with dependents will also receive higher benefits, increasing from $2,757 to $2,826.

The SSA’s earnings test, which affects early retirees, will also see changes. In 2025, early retirees can earn up to $1,950 per month ($23,400 annually) without a reduction in benefits. For those reaching full retirement age during the year, the exempt limit increases to $5,180 per month ($62,160 annually).

Furthermore, the SSA has simplified the COLA notice for beneficiaries, making it easier to find necessary information. Beneficiaries will start receiving these new notices by mail in early December, and those with a personal my Social Security account can view their COLA notice online starting in late November.

Additional changes include modifications to the definition of a public assistance household and the treatment of food donations for SSI recipients. As of 2025, food gifts will no longer be considered unearned income, which will benefit SSI recipients whose payments were previously reduced due to such gifts.