Over 72.5 million Americans will see a 2.5% increase in their Social Security and Supplemental Security Income (SSI) benefits in 2025. This adjustment helps recipients keep up with price increases, ensuring their purchasing power remains stable.
If you’re wondering how this change affects you, read on to find out more about the 2025 COLA and what it means for your benefits. For instance, the average retired worker will see their monthly benefit increase from $1,927 to $1,976, providing more financial breathing room.
What is changing and what is not in 2025?
The 2025 COLA brings several fundamental changes, such as:
- Tax Rates: The Social Security and Medicare tax rates remain unchanged for 2025. Employees will continue to pay a combined rate of 7.65%, while self-employed individuals will pay 15.30%.
- Maximum Taxable Earnings: The maximum earnings subject to Social Security tax will rise from $168,600 to $176,100. This change means higher earners will contribute more to the Social Security system.
- Retirement Earnings Test: For those under full retirement age, the earnings limit increases to $23,400 annually. If you earn above this limit, $1 in benefits will be withheld for every $2 earned.
- Disability Thresholds: The substantial gainful activity threshold for non-blind individuals increases to $1,620 per month, while for blind individuals, it rises to $2,700 monthly.
If you’re unsure how these changes might affect your situation, seeking legal help could be beneficial. An attorney with knowledge of Social Security law can assist you in understanding your rights and ensuring you receive all the benefits.
What should you do?
Starting in December 2024, most beneficiaries can access their COLA notices online through their Social Security accounts. The new COLA notice is designed to be more user-friendly and provide clear information about new benefit amounts and deductions. Here’s what you can do:
- Check your Social Security account for your COLA notice in December 2024.
- Review your new benefit amount and plan your budget accordingly.
- Report any life changes that might affect your benefits.
- Stay informed about Medicare changes for 2025.
Remember, these changes help your benefits keep up with rising costs. You can make the most of your Social Security benefits in 2025 and beyond by staying informed and acting when needed.