The Social Security Administration (SSA) is set to implement significant changes in May 2025 that will affect millions of beneficiaries. These changes include adjustments to the Cost-of-Living Adjustment (COLA), the taxable income cap, and potentially the retirement age. The COLA will be updated to a new rate of 3.7% for 2025, slightly lower than the 4.1% increase in the previous year.
This adjustment will raise the average Social Security Retirement Benefit from $1,907 to $1,977 per month, providing relief against rising inflation. The cap on earnings subject to Social Security tax will also increase from $160,200 to $176,100 in 2025, offering tax relief to some beneficiaries. Additionally, the current retirement age of 67 years may be extended to 68 or 70 years, a proposal still under review.
Social Security benefits to rise
These changes will impact various groups of beneficiaries, including retirees, recipients of Social Security Disability Insurance (SSDI), and veterans. With the 3.7% COLA increase, retired workers can expect their monthly benefits to increase from $1,907 to $1,977, representing an annual increase of approximately $70.
Individuals receiving Supplemental Security Income (SSI) will see their monthly benefits rise from $943 to $978, while couples receiving SSI will experience an increase from $1,415 to $1,467. The new SSA amounts will be distributed according to the usual schedule, based on beneficiaries’ birthdates. SSI beneficiaries will receive their payments on the first day of each month. The next payment is due on May 1, 2025.
These changes aim to enhance financial security for millions of Americans and ensure that Social Security benefits keep pace with economic conditions. Beneficiaries can visit the SSA’s official website for more detailed and official updates on the upcoming changes.