Cost-of-Living Adjustment (COLA) Information for 2025: What You Need to Know

Starting in 2025, more than 72.5 million Americans will see an increase in their Social Security and Supplemental Security Income (SSI) benefits thanks to a 2.5% Cost-of-Living Adjustment (COLA). Here’s everything you need to know about how this change affects you.

When Will the COLA Take Effect?

• Social Security Beneficiaries: The 2.5% COLA will begin with payments issued in January 2025 to nearly 68 million Social Security recipients.
• SSI Recipients: For about 7.5 million SSI beneficiaries, the increase will start earlier—on December 31, 2024.

Key COLA Highlights for 2025

1. Social Security Taxable Maximum: The maximum earnings subject to Social Security tax will rise to $176,100.
2. Earnings Limit Adjustments:
   • For workers under full retirement age, the earnings limit increases to $23,400. The SSA deducts $1 from benefits for every $2 earned over this limit.
   • For individuals reaching their full retirement age in 2025, the limit is $62,160. The SSA deducts $1 for every $3 earned above this threshold until the month they reach full retirement age.
   • No Earnings Limit applies for those who are at or above their full retirement age for the entire year.

Receiving Your COLA Notice

In December 2024, beneficiaries received COLA notices through their my Social Security accounts. For the first time, these notices featured an improved, easy-to-read design:

• One-page format with clear, concise information.
• Personalized details about your new benefit amount, deductions, and effective dates.
• Delivery Options: Choose to receive alerts via email, text message, or both when your COLA notice is ready.

Protecting Your Personal Information

Stay alert to potential scams. The SSA will never request personal information, payments via wire transfers, or gift cards. To avoid fraud:

• Do not share sensitive information over the phone or online unless you initiated the contact.
• Avoid clicking on suspicious links or opening attachments from unknown sources.

For added security, manage your account through SSA.gov and learn more about their privacy protection measures.

Why This Matters

With rising living costs, this 2.5% COLA ensures that Social Security and SSI benefits better reflect inflation, providing financial relief to millions of Americans. Stay informed and prepared for these changes as we head into 2025.

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