2025 Social Security COLA Announced

Oct. 11, 2025 – The Social Security Administration announced that the Cost of Living Adjustment (COLA) for recipients will be 2.5% in 2025. It is the smallest increase since the pandemic. Although doubtless recipients would have hoped for a bigger rise, the silver lining is it reflects the good news that inflation is slowing coming to heal. Recipients got a 3.2% boost in their benefits in 2024.

The 2.5 percent cost-of-living adjustment (COLA) will begin with benefits payable to nearly 68 million Social Security beneficiaries in January 2025. Increased payments to nearly 7.5 million SSI recipients will begin on December 31, 2024.

Earnings Limits

The Social Security payroll tax will be assessed on the first $176,100 of income in 2025, up from $168,600 this year. After that level, Medicare taxes continue but not those for Social Security. Many experts (and VP Harris) suggest that SS taxes continue on all income above that level, or perhaps just above a figure like $400,000. The Social Security trust funds will be exhausted by 2035, at which time the only money available to pay benefits will come from taxes on existing workers.

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The earnings limit for workers who are younger than “full” retirement age (see Full Retirement Age Chart) will increase to $23,400. (SSA deducts $1 from benefits for each $2 earned over $23,400.)

The earnings limit for people reaching their “full” retirement age in 2025 will increase to $62,160. (SSA deducts $1 from benefits for each $3 earned over $62,160 until the month the worker turns “full” retirement age.)

There is no limit on earnings for workers who are “full” retirement age or older for the entire year.

Your COLA Notice

In December 2024, Social Security COLA notices will be available online to most beneficiaries in the Message Center of their my Social Security account.

This year, for the first time, Social Security beneficiaries will receive a newly designed and improved COLA notice that makes it easier for customers to find the information they need most. The simplified COLA notice is now only one page, uses plain and personalized language, and provides exact dates and dollar amounts of a person’s new benefit amount and any deductions.

Bottom line

SS recipients can look forward to a small boost in their benefits beginning Jan. 2025. It might be large enough to make you happy, but these annual COLA’s show why Social Security is such a wonderful program.

Medicare Premiums

• Medicare Advantage. The average monthly premium is expected to decrease from $18.23 in 2024 to $17.00 in 2025. About 60% of enrollees will have a zero-dollar premium, and 83% will have the same or lower premium than in 2024. 
• Medicare Part B. The standard premium is expected to increase by 5.9% from $174.70 in 2024 to $185 in 2025. Higher-income retirees subject to IRMAA (Income-Related Monthly Adjustment Amount) may pay an additional $74 per month