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If you or a loved one is receiving Social Security benefits and/or Supplemental Security Income (SSI), you will see an increase in benefits in 2025.
As recently announced by the Social Security Administration (SSA), payment will be increasing by 2.5% for over 72.5 million people receiving benefits from the SSA. This will lead to an average increase in Social Security retirement benefits of $50 per month. Increases for SSI will begin on December 31, 2024. Let’s dive into what this may mean for you.
The Social Security Act was created to reverse the widespread economic insecurity in the US during the Great Depression, providing financial support primarily to elderly and vulnerable populations. By collecting payroll taxes, the Social Security Administration can pay benefits to current recipients of Social Security benefits (including SSDI) and/or SSI.
To determine the amount of benefits to pay out, the Social Security Act outlined the use of the cost-of-living adjustment (COLA). The COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers. It is important to understand that the COLA represents how the cost-of-living has increased over time – in other words, it adjusts to the yearly inflation level so that the benefits you receive are not worth less and less over time.
As of January 2025, the COLA increase will be 2.5%. Hence, the Social Security Administration will also be increasing payments by 2.5%.
To adjust for the higher payments, the Social Security Administration will need to increase the amount of payroll taxes it collects. This means the maximum earning threshold subject to the Social Security tax is set to increase from $168,600 to $176,100 (in other words, the tax that an earner must pay to the SSA stops increasing once their wages reach this number).
On the other side of the change, any recipient of Social Security benefits or SSI can expect to receive an increase in their monthly payments. Individuals who will see increased benefits include:
For example, someone earning payments of $1,000 in Social Security benefits in 2024 can expect their payments to be $1,025 in 2025 after the 2.5% increase.
Social Security beneficiaries will be receiving a new and improved COLA notice by mail beginning in early December. This notice has been uniquely designed to be personalized and easily comprehensible. You will be able to identify the exact date and dollar amount changes you will see to your Social Security benefits.
The SSA has also created an online platform to view your notice. You will be able to set up your “my Social Security” account to access important notices and messages. To get started, visit www.ssa.gov/myaccount.
If you or a loved one is disabled and unable to work, or need low-income financial assistance, you may be eligible for Social Security benefits. As the application process may take some time, it is important to apply for these benefits as soon as possible. However, we understand that the application process may feel intimidating and complex. At Jan Dils, we have an experienced team of attorneys ready to ensure you get the Social Security benefits that you deserve. Not only are we here to represent clients in West Virginia, but we have the capabilities to represent clients nationwide! Contact us today to start learning more about your eligibility for Social Security benefits after the 2025 COLA increase.
To Schedule an Appointment, Call Us Toll Free at 1.877.873.8208 or Email Us for a Prompt Response.
Jan Dils, Attorneys at Law
