Social Security Benefits to Increase 2.5% in 2025

The Social Security Administration has announced a 2.5% cost-of-living adjustment (COLA) for 2025, impacting over 68 million beneficiaries, with average increases translating to about $50 more per month. This adjustment, lower than the previous year's 3.2%, reflects a slowdown in inflation, which was reported at 2.6% for the year ending October 2024. Additionally, the earnings test limit will increase, allowing retirees under full retirement age to earn more without losing benefits, with the new threshold set at $23,400. The maximum amount of earnings subject to Social Security tax will also rise to $176,100. Beneficiaries will receive notifications about their new benefit amounts starting early December 2024, with simplified notices now available online. For those receiving both Social Security and Supplemental Security Income (SSI), increased payments will start on December 31, 2024, offering essential financial support for many low-income seniors and disabled individuals.