The cost of living adjustment (COLA) for 2025 has been set at 2.5%, as announced last October by the Social Security Administration (SSA), marking a significant drop compared to 3.2% in 2024 and the 8.7% corresponding to the 2023 adjustment. Goodbye to that increase that you have enjoyed in your Social Security payments throughout the ending year.
This change, which affects millions of beneficiaries in the United States, is designed to adapt monthly payments to inflation, ensuring that those who depend on these benefits maintain their economic stability in the face of the increase in the cost of living, which has been fluctuating in recent years due to various global circumstances, such as the pandemic or political upheavals in the world.
January comes with increased Social Security payments
This COLA adjustment directly impacts the maximum amounts of Social Security benefits. For those receiving full retirement benefits, monthly payments will increase from $3,822 in 2024 to $4,018 in 2025.
On the other hand, those who chose to delay their retirement will be able to enjoy the most significant increase, with their payments increasing from $4,873 to $5,180. But not everyone can qualify to receive this maximum amount.
There are some tricks you can do to get this juicy check increased to $5,180. To begin with, the full retirement age varies depending on the year of birth. For those born in 1960 or later, the FRA is 67 years. However, you can continue working and delay retirement until age 70 to maximize your benefits.
You can get up to $5,180 in Social Security benefits
If you wait until age 70, each month you delay retirement after FRA increases your monthly payment. This increase is 8% for each year you postpone your retirement, up to a maximum of 32% if you delay until age 70.
Additionally, you need to have worked enough years to have made your corresponding contributions: You need to have worked and contributed to the Social Security system long enough to qualify. Generally, 40 credits of work are required, which is equivalent to approximately 10 years of work.
The amount of your retirement benefits will also depend on your average earnings during your working years. Social Security uses your 35 years of highest earnings to calculate your benefit. The higher your income during those years, the larger your payment will be.
In any case, it is always advisable to consult with a retirement expert, so that they can tell you with greater certainty what your options are when it comes to retiring. You can use the SSA’s “my Social Security” online tool to check your estimated benefits today, and make projections for the future.