Social Security and SSI Benefits Set for 2.5% Increase in 2025

The Social Security Administration (SSA) announced on October 10, 2024, that Social Security benefits and Supplemental Security Income (SSI) payments for over 72.5 million Americans will see a 2.5% increase in 2025. This adjustment comes as a result of the annual cost-of-living adjustment (COLA), which aims to help recipients keep up with inflationary pressures. According to the SSA, the typical increase in Social Security retirement benefits will amount to approximately $50 a month, starting in January 2025.

The average COLA increase over the past decade has been around 2.6%, with a notable 3.2% increase in 2024. Martin O’Malley, the Commissioner of Social Security, stated, “Social Security benefits and SSI payments will increase in 2025, helping tens of millions of people keep up with expenses even as inflation has started to cool.” This adjustment will affect nearly 68 million Social Security beneficiaries, while the 7.5 million SSI recipients will see their increased payments start on December 31, 2024.

In addition to the COLA, other adjustments based on wage increases will come into effect in January. Notably, the maximum amount of earnings subject to the Social Security tax, also known as the taxable maximum, will rise from $168,600 to $176,100.

Social Security recipients will begin receiving notifications of their new benefit amounts in early December through mail. This year, for the first time, the SSA will introduce a newly designed and improved COLA notice that aims to be user-friendly, providing essential information such as new benefit amounts and deduction details on a single page.

Beneficiaries with a personal online account can access their COLA notices online, potentially receiving alerts via text or email about new messages. However, those who choose not to receive notifications online will continue to receive them by mail.

The COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) as determined by the Bureau of Labor Statistics under the Department of Labor. For further details, the Social Security Administration encourages individuals to visit their website or contact them directly.