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Photo of David Dopkin

3 important Social Security changes took effect in January, 2025

On Behalf of | Jan 27, 2025 | Social Security Disability

Social Security benefits help support people in a variety of different situations. Some people rely on Social Security as a supplemental form of income during retirement. Others require benefits due to disabling medical conditions.

The rules that govern the different Social Security benefits programs sometimes change. Those changes can affect eligibility or the amount of benefits paid to individual recipients. There are three important Social Security changes that took effect in January 2025.

What rules has the federal government adjusted?

Retirement benefits increased

The annual cost of living adjustment (COLA) for 2025 was 2.5% and took effect as of payments issued in January 2025. Individuals may see an average increase in benefits of about $49, while couples can expect an average increase of $75 per month. That small increase can help older adults handle inflation, which can make balancing a budget on a fixed income difficult.

Maximum taxable income also increased

The Social Security Administration (SSA) also adjusted the maximum amount of income subject to Social Security tax. People only have to pay Social Security tax on the first $176,100. Anything over that is not subject to Social Security taxes. As wages and average living expenses increase, the amount of income subject to taxes must increase as well to effectively fund Social Security benefits programs.

SSI benefit caps increased

Supplemental Security Income (SSI) offers benefits for disabled people of all ages and retired adults with limited income. Those who qualify for SSI may now receive more each month. Individuals can receive up to a $967 maximum benefit, while married couples can receive up to $1,450. That small adjustment can make a major difference for those unable to work and lower-income retired adults.

Changes in benefit amounts and taxable income can have major consequences for working professionals and those receiving benefits. As program rules change, people may become eligible for benefits that they couldn’t receive previously or may receive more each month in benefits.

People already receiving Social Security benefits or planning to apply for them need to track changes to the program. Learning about Social Security rules can help people optimize their SSI benefits or more effectively navigate the application process.