The Social Security Administration (SSA) has announced a 2.5% cost-of-living adjustment (COLA 2025) to ensure that benefits keep pace with inflation. This adjustment is based on the increase in the Consumer Price Index for Wage Earners and Urban Employees (CPI-W) for the third quarters of 2023 through 2024. Social Security and Supplemental Security Income (SSI) recipients will see their payments increase beginning in January 2025.
As for tax rates, Social Security and Medicare contributions are the same as last year: salaried employees will continue to pay 7.65%, while the self-employed will pay 15.30%. The Social Security portion (6.20%) applies to earnings up to the taxable maximum, which increases from $168,600 in 2024 to $176,100 in 2025. Medicare taxes (1.45%) apply to all income, with an additional 0.9% for individuals earning more than $200,000 ($250,000 for married couples filing jointly).
Disabled people, retirees and surviving spouses
For individuals receiving disability benefits, the Substantial Gainful Activity (SGA) threshold increases to $1,620 per month for non-blind individuals and $2,700 per month for blind individuals. The Trial Work Period (TWP) threshold increases to $1,160 per month. SSI benefits will also increase: individuals will receive $967 per month (up from $943 in 2024) and couples, $1,450 per month (up from $1,415 last year).
Average Social Security payments will also increase with the COLA adjustment. Retired workers will see their monthly benefits increase from $1,927 to $1,976, while elderly couples where both are receiving benefits will see an increase from $3,014 to $3,089. Surviving spouses with two children will see their benefits increase from $3,669 to $3,761, and elderly unmarried surviving spouses will receive $1,832, up from $1,788 previously. Disabled workers, along with their spouses and children, will see their benefits increase from $2,757 to $2,826.
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