1. COLA rises
The first thing to know about Social Security in 2025 is that the COLA will rise by 2.5%. This adjustment will lead to an average increase of $50 in monthly benefits for retired workers receiving Social Security beginning in January.
In simpler words, the average check for retirees will increase from $1,927 to $1,976. If we consider a couple in which both partners receive benefits, their approximate payment will increase from $3,014 to $3,089.
Since 1975, the SSA has linked COLA adjustments to the Consumer Price Index for urban wage earners and clerical workers (CPI-W). To determine the cost of living adjustment, the Social Security Administration compares the third-quarter CPI-W of the previous year to the third-quarter CPI-W of the current year. After this, the COLA is simply adjusted based on the percentage change in the CPI-W from one year to the next.
…We have some good news! Keep reading to find out more!
2. Maximum Social Security benefit might increase
A worker who retires at full retirement age will receive a maximum Social Security payout of $4,018 in 2025, an increase from $3,822 in 2024. Individuals who retire at full retirement age, which is 67 for those born after 1960, are eligible for this change.
As you probably know, those who retire before reaching full retirement age will receive a lesser maximum benefit because payments are diminished in this situation. However, if you want your benefits to be bigger, Social Security in 2025 could help you. All you have to do is delay your retirement, even if you have the full retirement age.
If you have further questions regarding how to get the maximum benefits, it’s always best to talk to a financial adviser, because things are different from one individual to another!
