2025 Social Security COLA Announced

Oct. 11, 2025 – The Social Security Administration announced that the Cost of Living Adjustment (COLA) for recipients will be 2.5% in 2025. It is the smallest increase since the pandemic. Although doubtless recipients would have hoped for a bigger rise, the silver lining is it reflects the good news that inflation is slowing coming to heal. Recipients got a 3.2% boost in their benefits in 2024.

The 2.5 percent cost-of-living adjustment (COLA) will begin with benefits payable to nearly 68 million Social Security beneficiaries in January 2025. Increased payments to nearly 7.5 million SSI recipients will begin on December 31, 2024.

Earnings Limits

The Social Security payroll tax will be assessed on the first $176,100 of income in 2025, up from $168,600 this year. After that level, Medicare taxes continue but not those for Social Security. Many experts (and VP Harris) suggest that SS taxes continue on all income above that level, or perhaps just above a figure like $400,000. The Social Security trust funds will be exhausted by 2035, at which time the only money available to pay benefits will come from taxes on existing workers.