Social Security payments are rising 2.67% in 2025, starting with the January benefit

The Cost-of-Living Adjustment (COLA) for 2025 is 2.67%. This means if you received a Social Security check in December 2024, your January 2025 payment will be 2.67% higher. The Social Security Administration announced this figure in October 2024, based on inflation data from the third quarter of that year.

The increase applies to all types of Social Security benefits: retirement, survivor, and disability payments. It also applies to Supplemental Security Income (SSI) payments, though SSI has different rules about how much you can earn and still receive benefits. If you receive both Social Security and SSI, you will see increases in both.

The amount you receive depends on your specific benefit amount. Someone receiving $1,500 per month will see an increase of about $40. Someone receiving $3,000 per month will see an increase of about $80. The exact dollar amount varies based on your individual benefit calculation, which was set when you first became may have access to to benefits.

Key Takeaways

  • The 2025 COLA is 2.67%, applied to all Social Security and SSI payments starting in January.
  • Your new payment amount appears in your January benefit; you do not need to take any action to receive it.
  • The increase is based on inflation measured from July through September 2024, announced by the Social Security Administration in October.
  • If you work while receiving Social Security before full retirement age, the earnings limit for 2025 is $23,400 per year, and benefits are reduced by $1 for every $2 earned above that limit.

Why COLA changes year to year

COLA is tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a measure of inflation published by the Bureau of Labor Statistics. The Social Security Administration compares the average CPI-W for July, August, and September of each year to the same three months of the previous year. If inflation has occurred, benefits increase by that percentage. If there is no inflation, COLA is zero and benefits do not rise.

The 2025 COLA of 2.67% reflects the inflation that occurred between the third quarter of 2023 and the third quarter of 2024. This was lower than the 2024 COLA of 3.2% and significantly lower than the 2023 COLA of 8.7%, which was the highest in four decades. The year-to-year variation means your benefit increase will differ depending on when you receive your statement.

COLA does not explore to Medicare premiums in the same way. While Social Security benefits increase with COLA, Medicare Part B and Part D premiums are set separately by the Centers for Medicare and Medicaid Services. In some years, the increase in your Social Security benefit is partially or entirely offset by a rise in your Medicare premium.

When you will see the increase in your account

If you receive Social Security by direct deposit, the increased payment will arrive in your bank account on your regular payment date in January 2025. The Social Security Administration pays benefits on a schedule based on your birth date: people born on the 1st through the 10th of any month are paid on the second Wednesday of each month, those born on the 11th through the 20th are paid on the third Wednesday, and those born on the 21st through the 31st are paid on the fourth Wednesday.

If you receive a paper check, it will be mailed according to the same schedule. The check will show the new amount. You do not need to contact Social Security or take any action; the increase is automatic.

You can view your benefit amount before January by logging into your my Social Security account at ssa.gov. The account shows your current benefit amount and your payment history. If you do not have an account, you can create one using your email address and Social Security number. This is the most direct way to confirm your new payment amount.

How the increase affects your taxes and work earnings

If you work while receiving Social Security before reaching full retirement age, the earnings limit for 2025 is $23,400 per year. This limit changes annually based on wage growth. If you earn more than $23,400, Social Security reduces your benefit by $1 for every $2 you earn above the limit. This reduction applies only in the year you reach full retirement age and only to earnings before the month you reach full retirement age; after that month, there is no earnings limit.

The increase in your benefit amount does not change how much you can earn. It only changes the dollar amount of your monthly payment. If you were already subject to the earnings limit, the higher benefit means the reduction will be calculated on a higher base amount.

For tax purposes, Social Security benefits may be taxable depending on your total income. The COLA increase may push some beneficiaries into a higher tax bracket if their combined income (adjusted gross income plus nontaxable interest plus half of Social Security benefits) exceeds certain thresholds. These thresholds are $25,000 for single filers and $32,000 for married couples filing jointly. They do not adjust for inflation, so more beneficiaries may owe taxes on their benefits over time.

How COLA affects Supplemental Security Income (SSI)

SSI recipients also receive the 2.67% increase in January 2025. However, SSI has different rules than Social Security. SSI is a needs-based program, meaning your benefit amount depends on your income and resources. The federal SSI benefit amount for 2025 is $943 per month for an individual and $1,415 per month for a couple, both increased by the 2.67% COLA.

If you receive SSI, the increase may affect your resource limit. SSI allows you to have up to $2,000 in countable resources as an individual or $3,000 as a couple. Some resources do not count, such as your home, one vehicle, and certain personal items. The increase in your SSI payment does not change these limits, but if you save the extra money, you must track it carefully to stay under the resource limit.

Some states provide supplemental SSI payments on top of the federal amount. These state supplements may or may not increase with COLA; it depends on state law. Contact your state's SSI program to learn whether your state supplement will increase in 2025.

What happens if you disagree with your benefit amount

If you believe your benefit calculation is incorrect, you can request a detailed statement of your earnings record from Social Security. This statement shows the wages credited to your account for each year you worked. Errors in your earnings record can lower your benefit amount. Social Security allows you to correct errors from up to three years, three months, and 15 days in the past.

To request a corrected earnings statement, create or log into your my Social Security account and select "Earnings Record." You can also call Social Security at 1-800-772-1213 or visit a local office. If you find an error, you will need to provide documentation such as W-2 forms or tax returns to prove the correct amount.

If you disagree with your benefit amount for other reasons, you can request an explanation from Social Security. This is different from a formal appeal, which applies to denials of new claims. An explanation helps you understand how your benefit was calculated and may reveal errors you can correct.

Frequently Asked Questions

Do I have to do anything to get the 2025 increase?

No. The increase is automatic. Your January payment will be 2.67% higher than your December payment. You do not need to contact Social Security or take any action.

Will my Medicare premium go up by the same amount as my Social Security increase?

Not necessarily. Medicare Part B and Part D premiums are set separately and may increase by a different percentage. In some years, the premium increase is larger than the COLA increase, which means your net benefit increase is smaller. Check your Medicare notices in December to see your new premium for 2025.

Does the COLA increase explore if I delay claiming Social Security past full retirement age?

Yes. COLA applies to all Social Security benefits, regardless of when you claim. If you delay claiming past full retirement age, your benefit amount increases by 8% per year until age 70, and COLA increases are applied on top of that higher amount.

What if I'm receiving Social Security as a survivor or dependent?

The 2.67% increase applies to all types of Social Security benefits, including survivor benefits paid to a widow, widower, or child, and benefits paid to a dependent spouse or parent. Your payment will increase in January by the same percentage as all other beneficiaries.

Can I find out my exact new benefit amount before January?

Yes. Log into your my Social Security account at ssa.gov and view your benefit amount. The account is updated with the new COLA amount in December, before payments are issued in January. If you do not have an account, you can create one using your email and Social Security number.