Social Security is an essential source of income for millions of retired workers in the United States, and 2025 is bringing some updates that retirees should know about. The big news? Social Security beneficiaries are receiving a 2.5% Cost-of-Living Adjustment (COLA) starting this year. This increase is designed to help retirees keep up with inflation.
For most retirees, this means their monthly payments will rise. The average retired worker will now receive $1,976 per month, up from $1,927 in 2024. While this isn’t a massive jump, every little bit counts when you’re on a fixed income.
How Much Could You Get?
The amount you’ll receive depends on a few key factors, like your lifetime earnings and the age you start claiming benefits. Social Security calculates your benefit based on your 35 highest-earning years. Here’s a breakdown of maximum benefits by age:
- If you wait until age 70 to claim benefits, you could receive up to $5,108 per month.
- At full retirement age (67 for most workers), the maximum benefit is $4,018.
- If you start early at age 62, the maximum benefit drops to $2,831.
These figures are the upper limits, so the actual amount you’ll receive will likely be less unless you consistently earned the maximum taxable income over 35 years. In 2025, the maximum taxable income is set at $176,100.
New Legislation Could Boost Your Payments
There’s more good news for some retirees. The recently passed Social Security Fairness Act repealed the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP). These changes primarily impact public sector retirees, who may now see larger monthly checks.
For those affected, the Fairness Act also includes retroactive payments for 2024, so this could mean a significant financial boost going forward.
When Will You Get Paid?
Social Security benefits are distributed based on your birth date:
- If you were born between the 1st and 10th of the month, payments arrive on the second Wednesday.
- For birthdates between the 11th and 20th, payments are sent on the third Wednesday.
- Those born after the 21st will receive payments on the fourth Wednesday.
For example, in January 2025, payments were issued on January 8, 15, and 22, depending on these groups.
Planning for the Future
Even with the COLA increase, many retirees are finding that Social Security doesn’t cover all their living expenses. Rising costs in healthcare and housing continue to be significant challenges.
One way to get the most out of your benefits is to delay claiming them for as long as possible. If you can wait until age 70, you’ll receive the highest monthly payment.
The Social Security Administration offers tools like the “my Social Security” account, which provides personalized estimates of your benefits. It’s a great resource to help you plan your retirement strategy.
While the 2.5% increase is welcome, it’s important to stay proactive with your financial planning to make the most of your retirement years. Take advantage of the new changes, understand your payment schedule, and explore ways to maximize your benefits. Every dollar matters!
