For the past 85 years, Social Security has served as a vital financial safety net for aging Americans who can no longer support themselves independently. According to a detailed analysis by the Center on Budget and Policy Priorities, this essential program lifts approximately 22.7 million people out of poverty each year, including a significant 16.5 million adults aged 65 and above.
While Social Security has been a steadfast pillar for over eight decades, it continually evolves. Each year brings updates to this iconic program. As we step into the new year, six significant changes to Social Security are now in effect.
Impact on Monthly Social Security Benefits
Among the most eagerly awaited announcements each year is the Cost-of-Living Adjustment, or COLA. This adjustment is the tool the Social Security Administration (SSA) uses to adjust benefits in response to inflation. For instance, if the prices for a typical basket of goods and services that retirees frequently purchase rise by 2%, 3%, or even 5%, Social Security benefits are ideally increased by a similar percentage to maintain beneficiaries’ purchasing power.
In 2025, recipients of Social Security checks will see a 2.5% cost-of-living adjustment (COLA). Although this represents the smallest COLA in four years, it is notable for being the fourth consecutive year with above-average increases when compared to the typical 2.3% rise over the past 15 years.
SSDI and Other Benefits to Change
For the average retired worker, this adjustment translates to a monthly increase of $49, bringing their monthly check to $1,976 in the upcoming year. In comparison, workers with disabilities and survivor beneficiaries will see their average benefit checks increase by $38, reaching $1,580 and $1,551, respectively, in 2025.
Despite the seemingly positive news of an above-average COLA, the reality on the ground is more complex. Persistently high shelter and medical-care expenses, along with rapidly increasing Medicare Part B premiums, continue to erode the purchasing power of each Social Security dollar.
As these factors persist, they present ongoing challenges for beneficiaries trying to make the most out of their Social Security benefits.