Social Security Announces 2.5% Benefit Increase for 2025

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Social Security benefits and Supplemental Security Income (SSI) payments for more than 72.5 million Americans will increase 2.5% in 2025, the Social Security Administration announced on Friday, October 10. 

On average, Social Security retirement benefits will increase by about $50 per month starting in January. Over the last decade the Cost-of-Living Adjustment (COLA) increase has averaged about 2.6 percent. The COLA was 3.2 percent in 2024.

Social Security will begin notifying people about their new benefit amount by mail starting in early December. The new simplified COLA notice will be only one page and will provide the exact date and dollar amounts of a person’s new benefit amount and any deductions. Individuals who have a personal My Social Security account will be able to view their COLA notice online.

The Social Security Act ties the annual COLA to the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) as determined by the Department of Labor’s Bureau of Labor Statistics. 

The NRLN advocates switching from CPI-W to CPI-E for the calculation of COLA. CPI-E is the Consumer Price Index for Americans 62 years of age and older. While both CPI-W and CPI-E measure the same goods and services, CPI-E factors in around 11% of its index for healthcare cost. The CPI-W only counts 5.6% of the overall index as healthcare expenses

For Americans still working, the maximum amount of earnings subject to the Social Security tax (taxable maximum) is slated to increase to $176,100 from $168,600.

Later this fall Centers for Medicare & Medicaid Services (CMS) will announce the Medicare Part B (medical services) premiums for 2025.

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National Retiree Legislative Network
Based in Washington, D.C., the National Retiree Legislative Network (NRLN) is the only nationwide organization solely dedicated to representing the interests of retirees and future retirees. Formed in 2002, the NRLN’s endeavors to secure federal legislation to protect retirees’ employer-sponsored pensions and benefits in addition to keeping Social Security and Medicare strong.

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