Social Security benefits will increase by 2.5% in 2025
Social Security recipients’ monthly checks are scheduled to increase by 2.5% in 2025. Analysts had expected the growth rate to be 2.5% in 2025. This is smaller than the increase over the past two years and reflects easing inflation. Recipients received a 3.2% increase in benefits in 2024, after a historic 8.7% increase in benefits in 2023 due to the highest level of inflation in 40 years.
Brief Americans must earn a certain amount of Social Security credits during their lifetime to qualify for retirement benefits that come from working and paying Social Security taxes. Currently, you need to earn $1,730 to earn one work credit under the Social Security program. In 2025, this number increases to $1,810.
WASHINGTON – In 2025, changes related to the value of work “credit” will go into effect, making it slightly more difficult to qualify for Social Security benefits in retirement.
To qualify for retirement benefits, Americans must earn a certain amount of Social Security credits during their lifetime. These credits are earned by working and paying Social Security taxes.
The number of credits does not affect the amount of benefits you receive each month. Instead, it will be used to determine a family’s eligibility for retirement and disability benefits, Medicare and survivor benefits, according to the Social Security Administration.
Here’s what you need to know:
Social Security changes coming in 2025
Currently, you need to earn $1,730 to earn one work credit under the Social Security program. In 2025, this number changes to $1,810.
American workers can earn up to four credits per year, and the amount of income required to earn one credit increases slightly each year in relation to inflation and average wages.
According to financial services site The Motley Fool, the change “should have no real impact” for people who work full time. It added that even people earning the minimum wage for 40 hours a week working 50 hours a week would have “enough income to secure four work units in 2025.”
However, the website says this is something to keep in mind for people who work part-time and hope to receive Social Security benefits in the future.
How is the Social Security Cost of Living Adjustment (COLA) calculated?
Adjustments are based on inflation data.
Meanwhile, the Social Security Administration also announced cost of living adjustments (COLA) for 2025 earlier this month. Next year, recipients will see a 2.5% increase in the amount of their monthly checks, which is smaller than the increases over the past two years. This reflects the easing of inflation. AARP estimated that a 2.5% COLA would add $48 per month.
The program is funded by payroll taxes collected from workers and their employers. The maximum amount of income subject to Social Security payroll taxes was $168,600 in 2024, but in 2025 the maximum amount increases to $176,100.
Some Social Security recipients will receive two payments in November
Meanwhile, some Social Security recipients will receive an additional check in November 2024 due to the payment schedule for the last two months of this year.
Those receiving Supplemental Security Income (SSI) are monthly payments for disabled and elderly people with little or no income or assets, usually paid on the first of each month.
However, if that day falls on a weekend or holiday, as was the case on Sunday, December 1st, the administration will pay earlier than scheduled.
In this case, the SSI recipient will receive their December payment on Friday, November 29th.
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This article was reported based on information shared by the Social Security Administration. Reported from Cincinnati.
