Social Security provides necessary assistance to billions across the United States spanning across the retired and disabled populations, and families of the deceased. With the surge in inflation and cost based on the average prices of living, the government is establishing a 2.5% Social Security for 2025. While that might not sound like much, it should help a little bit.
In this article, we will tell you in very simple language why this increase is being made, who will benefit from it, and how you can make your Social Security benefits even better.
How much will Social Security increase be for 2025?
The government has proposed a 2.5% Cost-of-Living Adjustment (COLA) for 2025. This means that those receiving Social Security benefits will begin receiving a little more money each month, to help alleviate some of the effects of inflation.
- Average Social Security benefit in 2024: $1,927 per month
- Estimated benefit in 2025 (up 2.5%): About $1,976 per month
- That’s an increase of about $49 per month, and a benefit of about $588 per year.
🔸 Example: If someone is currently getting $1,500 per month, a 2.5% increase would now give them $1,537.50 — an additional $450 annually.
Why is Social Security increasing?
Social Security is adjusted from time to time so that people can keep up with inflation. When this adjustment happens, it is called COLA (Cost-of-Living Adjustment). The COLA is based on prices of items related to the needs of everyday people – food, rent, gasoline, medicines, etc.
COLA hikes over the past few years:
| Year | COLA Increase |
|---|---|
| 2023 | 8.7% (highest since 1981) |
| 2024 | 3.2% |
| 2025 (Proposed) | 2.5% |
So even though the 2025 hike isn’t as high as before, it’s still essential to maintaining financial stability for millions of people.
Who will benefit from this hike?
- This COLA hike will affect about 72.5 million Americans, including:
- Retired individuals: Those receiving a Social Security pension
- Individuals with disabilities (SSDI recipients): Those who cannot work for physical or mental reasons
- SSI recipients: Low-income people who receive Supplemental Security Income
- Family members: Those whose earning member has died
How to increase your Social Security benefit?
Although COLA increases are automatic, there are ways you can make your total benefit more:
1. Don’t start taking Social Security too early
- If you start taking Social Security at age 62, you get less money.
- If you wait and claim until age 70, your monthly amount can increase by about 76%.
2. Work at least 35 years
- Your Social Security benefit is calculated based on your highest-earning 35 years.
- If you’ve worked less than 35 years, the remaining years are treated as $0 earnings, reducing your benefit.
3. Plan for Social Security taxes
- If you earn above a certain limit, up to 85% of your benefit could be taxable.
- You can reduce your tax burden by gradually withdrawing money from a retirement account (such as an IRA, 401(k)).
4. Don’t let your Social Security record go wrong
- Sometimes the Social Security Administration (SSA) can make mistakes in your income data.
- So create a my Social Security account and keep checking your earnings record there from time to time.
What changes can happen regarding Social Security in the future?
The 2025 COLA increase is certain, but apart from this, some other reforms are proposed, which are being considered:
🔹 Social Security Fairness Act
- It proposes to eliminate the deduction for public service workers (such as teachers, police, firefighters).
- This can benefit more than 3 million retirees.
🔹 Social Security 2100 Act
- It proposes to increase the Social Security tax on rich people.
- This is a step towards increasing the benefits of low-income elderly.
Can Social Security end?
Social media is abuzz with rumors that Social Security will soon be phased out — but the reality is different.
According to the 2024 Social Security Trustees Report, Social Security’s trust fund is capable of paying out the full amount until 2035. If no action is taken after that, benefits could drop by nearly 80% — but Congress is working on that.
Conclusion: Learn, plan, and take advantage
- The 2025 2.5% COLA increase may seem small, but it’s a relief for millions of Americans. In a time when gas, rent, and prescription drug prices are constantly rising, every dollar counts.
If you’re a Social Security beneficiary, you can: - Check your benefits
- Reassess your budget
- And keep checking your Social Security record
Prepare for the future now so you don’t have to struggle in retirement.
FAQs
1. What is the proposed Social Security boost?
The proposed boost is an increase in Social Security benefits aimed at providing additional financial support to millions of beneficiaries, especially those on fixed incomes.
2. Who would benefit from this Social Security increase?
Retirees, disabled individuals, and low-income beneficiaries who are currently receiving Social Security payments are the primary recipients expected to benefit from the proposed increase.
3. How much more could I receive with the proposed boost?
The exact amount can vary, but some proposals suggest increases ranging from $50 to several hundred dollars per month, depending on your current benefit and eligibility.
4. When will the proposed Social Security increase take effect?
The boost is still in the proposal stage. If approved by Congress, it could be implemented as early as late 2025 or in the next fiscal year.
5. Do I need to apply separately to receive the increased amount?
No, if you’re already receiving Social Security benefits, any approved increase will be automatically added to your monthly payments.