Social Security is part of the financial security system that protects millions of Americans who retire, become disabled, or lose someone special. For 2025, the COLA is increased by 2.5% of monthly benefits for recipients. The percentage increase was based on the Consumer Price Index for Urban Wage Earners and Clerks (CPI-W).
Social security benefits
The SSA has indicated a 2.5% COLA for 2025, starting in January. The average monthly pension would increase by about $50, from $1,927 to $1,976.
However, it is still increasing, but lower than in recent years and follows a 3.2% increase in 2024 and an 8.7% adjustment in 2023. This annual COLA is intended to help the recipient keep pace with inflation as measured by the Consumer Price Index for urban wage earners and employees (CPI-W).
This 2.5 percent increase in the surplus will positively affect about 68 million Social Security beneficiaries. On December 31, 2024, 7.5 million Supplemental Security Income (SSI) recipients will also enjoy the impact of this increase.
Types of social security benefits
Types of benefits paid by the Social Security Administration include the following:
- Retirement benefits: These benefits, through work and social security contributions, sustain the retiree after retirement. The amount is determined based on the recipient’s earningsMrrecords and at what age these benefits are acquired.
- Social Security Disability Insurance (SSDI): This benefit is paid to people who meet medical and work history requirements but are no longer able to work.
- Supplemental Security Income (SSI) is a need-based program that provides earnings-related benefits to elderly or disabled people who have limited income and resources.
- Survivor Benefits An eligible family member of the deceased, such as a spouse, children or even dependent parents, may receive a survivor benefit.
Social Security Benefit Amounts for 2025 COLA
Inflation levels should therefore be equalized and adjustments are made through cost of living adjustments made from time to time on Social Security.
Maximum monthly payments:
- Single: $967 per month.
- Individual with eligible spouse: $1,450 per month.
- Significant person: $484 per month.
Unrounded annual amounts:
- Single: $11,321.49 in 2024, adjusted to $11,604.53 in 2025.
- Eligible couple: $16,980.36 in 2024, rising to $17,404.87 in 2025.
- Dependent: $5,673.73 in 2024, increased to $5,815.57 in 2025.
Limitation of taxable earnings
- The maximum amount of earnings subject to Social Security tax will rise from $168,600 in 2024 to $176,100 in 2025. Because of this cap, higher earners will be taxed at a slightly higher percentageMre of their income.
- Their tax rates, however, remain the same: 6.2 percent for employees and 12.4 percent for the self-employed.
These adjustments mitigate the increasing costs of social security programs due to demographic changes, for example, the increasing age of a significant portion of the population and fewer contributors compared to beneficiaries.
Fulfilling the conditions for receiving social assistance
There are different types of Social Security benefits with different eligibility requirements:
- Retirement benefits: Generally, you’ll need to earn 40 service points – about 10 years of work to qualify for retirement benefits. This is reduced, however, if you apply before full retirement age, which is 67 for anyone born in 1960 or later.
- Disability Insurance (SSDI): A medically documented disability that prevents substantial work and sufficient work credits based on the individual’s age at the onset of the disability qualifies the individual for SSDI.
- Supplemental Security Income (SSI): SSI does not require accumulation of work credits, but has strict income and asset limits, so the program is specifically designed for those with limited financial resources.
- Survivor benefits. Families are entitled to family allowances from the records of the deceased worker’s earnings; survivors include spouses, children and dependent parents.
How to apply for social benefits?
Applicants may also submit applications online through the SSA website. Applications must be completed in person and submitted to a local SSA office. The following steps are included in the application:
- Go to the SSA website at ssa.gov and open an account. Once that account is opened, you can then access your earnings history, get benefit estimates and even apply for them.
- Personal information will include social security numbers; birth certificates; employment history; direct deposit bank account information; if applicable, and military service information including dates of duty and spousal information.
- Applications can be made online, by phone or at an SSA office. Applying online for most types of benefits will take less time.
- It is very important to verify your information to avoid delays. The SSA will process your application; they can also ask for additional information after they provide it.
- Most requests usually take weeks or months to process. SSA will mail applicants to check application status.
