Social Security: What To Expect in 2025

What's New

As 2025 approaches, retirees and other Social Security recipients should be aware of several changes to benefits and services provided by the Social Security Administration (SSA).

In the coming year, how much Social Security a person receives will change, along with certain rules regarding income limitations.

There are also potential changes coming to customer services, and around three million people could become eligible for SSA retirement payments if lawmakers pass new legislation.

Why It Matters

The SSA pays out retirement, survivor and disability benefits to around 70 million Americans every month, and the changes will go into effect immediately.

What to Know

New Benefit Amounts for 2025

In October 2024, the SSA announced a 2.5 percent boost to benefits issued in 2025. Every year, the Cost-of-Living Adjustment (COLA) alters benefits administered by the SSA to keep payments in line with inflation.

The first adjusted payments will be made in December 2024 for those who collect Supplemental Security Income (SSI) and in January 2025 for people who get regular Social Security payments.

In 2025, the following applies:

• Maximum Social Security benefit for 2025: $4,018 per month
• Maximum Social Security benefit including Delayed Retirement Credits for 2025: $5,108 per month
• Maximum Supplemental Security Income benefit for 2025: $967 for a single person, $1,450 for a couple.

However, the majority of retirees do not receive the maximum amount, so payments could be lower than this amount. The estimated average monthly benefit for 2025 is $1,976, the SSA has confirmed.

Annual Earnings Limits

If you collect Social Security retirement payments but have not yet reached the Full Retirement Age—67 for those born after January 2, 1960—and are still employed, there are limits to how much you can earn before your payments are reduced.

For 2025, the following thresholds apply:

• Annual Earnings Limitation: $23,400
• Monthly Earnings Limitation: $1,950
• Annual Earnings Limitation in the year you reach full retirement age: $62,160
• Monthly Earnings Limitation in the year you reach full retirement age: $5,180

If you work and are at full retirement age or older you may keep all of your benefits, no matter how much you earn.

What Happens Next

Some other changes to SSA benefits and services could be on the way, although these are not set in stone.

Longer Customer Service Waits

While customer service standards at the SSA have improved recently, an outstanding budget request required to maintain its current service levels has not been approved, and the SSA has warned that "customer service will decline" if lawmakers do not pass the request in the upcoming budget negotiations.

In November, the SSA imposed a hiring freeze after Congress declined to provide the additional funding in its latest continuing resolution, approved in September. These resolutions, designed to avert government shutdowns, temporarily maintain current spending levels until lawmakers are able to agree on a full-year budget.

In September, House Republicans rejected a budget anomaly request from the Biden administration to raise the SSA's 2024 funding from $14.2 billion to $15.4 billion, consistent with its fiscal year 2025 proposal. With a December 20 deadline for another stopgap funding measure, it remains uncertain whether this request will be approved to sustain the agency through March 2025.

If the funding request is not granted, the SSA's ability to deliver timely customer service could be significantly impacted. The government agency said in a statement to Newsweek that if it "does not receive increased appropriation through March, over 2,000 additional employees will be lost through attrition in the next three months, including experienced staff."

The statement added: "Customer service will decline as wait times in our field offices and on the 800 Number increase, backlogs grow, and customers experience further delays in waiting for their claims to be processed."

Social Security Fairness Act

The Social Security Fairness Act has passed both chambers of Congress and will expand access to benefits for nearly 3 million Americans.

The bill passed the House in November and the Senate in December, both with significant bipartisan support. Once signed by the president, the legislation will repeal two key provisions: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), and will be applicable to all Social Security benefits paid from January 2024.

The WEP reduces Social Security benefits for individuals who receive pensions from public sector jobs—such as those held by state and federal employees—that did not require Social Security payroll tax contributions. This reduction applies even if these individuals contributed to Social Security through other employment and qualify for benefits. Currently, around 2 million beneficiaries are affected by this provision.

The GPO reduces spousal or survivor benefits for retired federal, state, and local government workers who did not pay into Social Security funds through their payroll taxes. Approximately 800,000 retirees are impacted by this rule.

UPDATE 12/26/24 at 05:35 a.m. ET: The article was updated to reflect the passage of the Social Security Act.