What Social Security Beneficiaries Should Know About 2025 Numbers
Declining inflation led to the lowest cost-of-living adjustment since 2020, with the 2025 COLA set to rise 2.5%.


One of the most important features of Social Security is the annual cost-of-living (COLA) increase, which is designed to help retirees’ income keep up with inflation. But after several years of above-average adjustments, seniors will see just a modest increase when the first payment lands in their bank account in January.
In October, Social Security announced that beneficiaries will receive a 2.5% COLA adjustment in 2025. The increase will boost the average monthly benefit to $1,976, up from $1,927 in 2024, or $3,089 for a couple who are both receiving benefits, up from $3,014 in 2024.
The increase is the smallest since 2020, when the COLA was just 1.6%. In 2023, benefits climbed by 8.7%, reflecting a sharp rise in prices the previous year. The 2025 adjustment, which is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), reflects a decline in the inflation rate in the third quarter of 2024 from the same period a year earlier.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Advocates for seniors contend that the annual increase doesn’t reflect retirees’ actual expenses, which are disproportionately affected by the rising cost of housing and health care. In 2025, Medicare Part B premiums, which are typically deducted from Social Security payments, will be $185 a month, up $10.30 from $174.70 in 2024.
Other Social Security changes
Although retirees’ annual cost-of-living adjustment gets the most attention, other inflation-related revisions affect high-income workers, along with Social Security beneficiaries who continue to work.
Most employees pay 6.2% in Social Security payroll taxes, while employers pay an additional 6.2%, for a total payroll tax of 12.4%. However, payroll tax is not withheld on income that exceeds a certain threshold, which is adjusted annually to account for inflation. In 2025, workers will pay Social Security taxes on up to $176,100, up 4.45% from $168,600 in 2024.
Meanwhile, retirees who continue to work after filing for benefits will be able to earn more in 2025 without reducing their monthly payments. If you file for Social Security before you reach full retirement age (66 for beneficiaries born between 1943 and 1954, gradually increasing to 67 for beneficiaries born after that) and earn income from a job, Social Security applies the “earnings test” to your income and will withhold a portion of your benefits once your earnings exceed a certain threshold.
In 2025, the amount workers who haven’t reached full retirement age can earn before Social Security withholds a portion of their benefits will increase by nearly 5%.
How to get help with Social Security
Figuring out when to file for Social Security and how to get the most from your benefits is complicated, and many seniors look to the Social Security Administration for assistance. Unfortunately, retirees seeking help often confront long lines at branch offices or endure extended wait times on the phone.
During an October webinar sponsored by the Urban Institute, Social Security Commissioner Martin O’Malley attributed the delays to staffing shortages and a backlog of disability claims, which account for about half of the agency’s administrative budget. O’Malley says Social Security has made progress in processing those claims and has reduced the average wait time for individuals who call the agency’s customer service number (800-772-1213) from about 42 minutes to 11 minutes.
If you want to apply for Social Security or get more information about your retirement benefits, you may avoid waiting on the phone by creating an account at www.ssa.gov/myaccount. Once you’ve done that, you can review your most recent Social Security statement, receive an estimate of your monthly benefits and apply for benefits if you’re eligible. Social Security also offers tools you can use to estimate benefits based on different scenarios.
If you set up an account before September 18, 2021, you’ll need to go online and transition it to Login.gov, a sign-in service administered by the federal government. Social Security officials said the change will simplify the process of signing in securely to accounts. You don’t need to create a new Social Security account to make the change.
Even if you’re years from retirement, you should create a Social Security account or update the one you already have. Once you’ve logged in, you can review your earnings record for potential errors that could reduce the benefits you receive. Errors can occur because an employer reported your earnings using the wrong Social Security number, for example, or because you changed your name and didn’t report it to Social Security.
You can also use your online account to determine whether you’ve earned enough credits to qualify for Social Security benefits (most people need 40 credits to be eligible). You can earn up to four credits a year, and the amount you need to earn to receive a credit is adjusted every year. In 2025, you must have wages and/or self-employment income of $1,810 to earn one credit, and you must earn $7,240 to get four full credits.
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
Related content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.
-
How Fast Does Your Internet Really Need to Be?
From solo streamers to bustling smart homes, here’s how to match your internet speed to your lifestyle and know when it’s time to upgrade.
-
RMD, Roth, and SS: Test Your Knowledge of Retirement Tax Rules
Quiz Don't let the IRS catch you off guard. Take our quiz to reveal common retirement tax rules that could save (or cost) you thousands.
-
You May Want To Think Twice Before Selling These Four Assets in Retirement
Sitting on little gold mines? It's natural to want to cash out when you retire. Here’s why you may not want to.
-
Treat Home Equity Like Other Investments in Your Retirement Plan: Look at Its Track Record
Homeowners who are considering using home equity in their retirement plan can analyze it like they do their other investments. Here's how.
-
Do You Know Your ABCDs? The Essential Medicare Parts Quiz
Quiz Test your basic knowledge of different parts of Medicare in our quick quiz.
-
Financial Fact vs Fiction: The Truth About Social Security Entitlement (and Reverse Mortgages' Bad Rap)
Despite the 'entitlement' moniker, Social Security and Medicare are both benefits that workers earn. And reverse mortgages can be a strategic tool for certain people. Plus, we're setting the record straight on three other myths.
-
Boost Your HSA Savings with These Smart and Savvy Moves
Wednesday is National HSA Awareness Day. Health Savings Accounts (HSAs) provide savers with a triple tax benefit and even more if you adopt these strategies.
-
Medicare Open Enrollment: Why You Need to Pay Extra Attention to Part D, From a Financial Adviser
The lowest premium for prescription drug coverage might not actually save you the most money. Make sure you take copays into consideration and do the math.
-
Don't Miss Out! A Quiz on Medicare Enrollment Deadlines
Quiz Test your basic knowledge of Medicare enrollment periods in our quick quiz.
-
Retirement Road Trips with Pets: Tips for Traveling with Your Dog or Cat
Hitting the road for a retirement adventure with your pet? Check out these tips to keep your furry friend happy and safe on the journey!