2025 Social Security Update - Makofsky Valente Law Group, P.C.

Social Security: What’s Changing in 2025?

A new year is upon us and that means that the Social Security Administration has made some changes. We highlight the most important of those here. You can also visit the Social Security Administration’s Fact Sheet on the changes, available here.

Cost of Living Adjustment (COLA):
In 2025, Social Security beneficiaries will receive a 2.5% COLA. While this is a smaller increase than in 2024, it will still increase retirement benefits by about $50 per month on average.

Maximum Social Security Benefits:
Workers who reach full retirement age will receive a maximum benefit of $4,018 a month, up from $3,822 in 2024. (Full retirement age varies on the year you were born, but is 67 for anyone born after 1959).

Taxable Earnings Cap Raised:
The maximum taxable earnings on Social Security (OASDI only) has been raised from $168,600 in 2024 to $176,100 in 2025. (There is no limit on taxable earnings for Medicare).

Exempt Retirement Earnings:
It’s hard to live on Social Security alone and older Americans are often working past retirement age. This can come with penalties if you are under full retirement age.  If you are already at full retirement age and collecting Social Security, there is no limit on earnings. However, if you are under full retirement age and collecting Social Security, you may only earn up to $23,400 a year in 2025 before being penalized. If a beneficiary is reaching full retirement age in 2025, he/she can earn up to $62,160 this year.

Note about Medicare:
Be aware that Medicare Part B premiums are increasing to $185 a month in 2025, and most enrollees typically have it deducted from their Social Security payments, which will partially offset the Social Security COLA.

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