Social Security plays a vital role in the financial support of millions of people, especially retirees. Around 96.7% of adults between 60 and 89 rely on Social Security in some way, and for many, it’s a major part of their income. Over half of people aged 65 and older get at least half of their income from Social Security, and 25% rely on it for 90% or more. Because of its importance, changes in Social Security can affect retirees’ lives. Let’s look at the updates for 2025 and what you need to know about them.
Social Security Payment Increase: What’s New for 2025?
Social Security and Supplemental Security Income (SSI) payments will rise by 2.5% starting in January 2025. This increase will affect nearly 73 million Americans, helping to keep up with inflation. For example, if you currently get $1,920 a month, you will now receive about $1,968. This means an extra $50 a month.
While this raise is smaller than last year’s 3.2%, it still helps beneficiaries stay ahead of the rising costs in daily life. The goal of this increase is to make sure people on Social Security maintain their purchasing power, despite inflation.
Changes to Taxable Income Limits for Social Security
In 2025, the maximum amount of income that can be taxed for Social Security will increase. It will go up from $168,600 to $176,100. This means wages up to this amount will be taxed at a 12.4% rate, which is split between the employee and the employer.
- Employee contribution: Maximum $10,918.20
- Employer contribution: Matches employee’s contribution at $10,918.20
- Self-employed: Full 12.4% tax, totaling $21,836.40 on income up to $176,100
How Social Security Beneficiaries Will Be Notified
If you are a Social Security beneficiary, expect to receive an updated benefit notice by December 2024. The notice will have a new, simplified design to make it easier to understand. If you have a My Social Security account, you can check your updated benefit information online before the notice arrives in the mail. Additionally, you can sign up for email or text alerts for even faster updates.
Additional Changes to Medicare and Social Security
If you receive both Social Security and Medicare, you can also monitor updates related to Medicare. These changes will be available online through your My Social Security account message center. Medicare updates are scheduled to be available by the end of November 2024, so it’s a good idea to keep an eye on Medicare.gov for the latest information.
These updates to Social Security aim to help retirees manage rising costs. By staying informed, you can make sure you take full advantage of the adjustments that are coming in 2025.
Changes in Social Security for 2025
| Change | Old Amount | New Amount |
|---|---|---|
| COLA Increase | 3.2% | 2.5% |
| Maximum Taxable Earnings | $168,600 | $176,100 |
| Employee Contribution | $10,918.20 | $10,918.20 |
| Employer Contribution | $10,918.20 | $10,918.20 |
| Self-Employed Contribution | $21,836.40 | $21,836.40 |
FAQ’s
When will I see my Social Security benefit increase for 2025?
Your updated benefit will be reflected starting January 2025. You will receive a notice with your new benefit amount by December 2024.
How do I check my Social Security updates?
You can check your benefit information online through your My Social Security account. You can also opt to receive email or text notifications.
What changes will happen to the maximum taxable earnings for Social Security in 2025?
The maximum taxable income will increase from $168,600 to $176,100, which means more income will be subject to Social Security taxes.