Beneficiaries of Social Security checks will be pleased to see a slight increase in their monthly benefit for 2025 as an array of changes are being implemented with the Social Security Administration (SSA) and its processes. The Cost of Living Adjustment (COLA) came into effect as of January and the full retirement age was also dealt a slight increase and now stands at 66 years and ten months of age for those born in 1959.
Increased Social Security benefits for 2025
Social Security benefits are a fixed amount paid out recipients and it is determined in relation to the income earned by the beneficiary prior to becoming a recipient. As such, the amount paid each month is fixed, however accommodations for inflation each year do need to be made so that the beneficiary’s money still has buying power.
This annual adjustment is known as the Cost of Living Adjustment, or COLA, and is determined using data collected during the third quarter of each year. The COLA for 2025 was revealed to be 2.5% last October. Subsequently, this increase has come into effect as of January 2025.
With the new adjustment, the average retirement benefit per month will now be increased from $1,927 to $1,976 as a means of helping recipients combat the effects of inflation. Some advocacy groups, however, feel that this miniscule adjustment still “falls short amid rising living costs.”
“The Social Security adjustments for 2025 reflect our commitment to maintaining the program’s long-term stability while ensuring benefits remain fair and responsive to economic conditions,” the Social Security Administration claimed in a statement.
Other changes with the SSA
The accepted average retirement age for Americans is around 65 years old. When it comes to claiming benefits, however, the SSA has slightly differing ages at which a beneficiary can begin receiving their full benefits. So whilst a beneficiary could begin claiming benefits from age 62, they will only be able to claim their full benefits once they reach the SSA regulated full retirement age which is usually determined in relation to one’s birth year. Additionally, if an individual begins claiming benefits before reaching their full retirement age, their benefits will be reduced by a small percentage for each month until the FRA is reached.
As such, the agency has announced that the full retirement age, or FRA, for those born in 1959 has been increased to 66 years and ten months of age. This is a continuation of the gradual shift of those born in 1960 or later having an FRA of 67. Additionally, retirees who delay their benefits beyond their full retirement age will be eligible for higher monthly benefits up to the age of 70.
Another major policy change at the SSA includes the elimination of the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). The WEP and GPO caused millions of public sector employees such as teachers, police officers, or firefighters, to be subjected to reduced benefits.
Subsequently, the Social Security Fairness Act was signed into law as of January and as a result, the impacted employees will now be able to receive their full benefits. Additionally, a once off retroactive lump sum dating back to January 2024 will be paid to these beneficiaries to make up the difference in benefits.
Workers who are recipients of Social Security benefits prior to reaching FRA will also have their earnings limits changed. The new cap stands at $23,400 and as such, those earning above that threshold may notice some reductions in their benefits. Additionally, the threshold for maximum taxable earnings has risen to $176,100.
Lastly, eligibility for Achieving a Better Life Experience accounts is slated for expansion in 2026. This account “helps people with disabilities save and invest without jeopardizing federal benefits.” The qualifying age for disabilities is set to increase from 26 to 46, meaning that around 6 million more Americans can potentially benefit.