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Social Security recipients will see an average of $50 more in their monthly checks next year as the government adjusts for inflation.
The cost-of-living adjustments are based on inflation over the past year.
Thursday’s announcement of a 2.5% increase comes as inflation remains elevated but has improved from price rises that led to the 6% increase in benefit checks in 2022, 9% boost in 2023 and 3.2% rise this year.
The adjustment applies to seniors who collect basic Social Security benefits and those getting Supplemental Security Income payments.
“Social Security benefits and SSI payments will increase in 2025, helping tens of millions of people keep up with expenses even as inflation has started to cool,” said Martin O’Malley, Social Security’s commissioner.
The adjustment is also applied to payroll taxes.
Income up to $176,100 will be subject to the payroll tax for Social Security next year, up from $168,600 this year. Employees pay 6.2% tax and employers pay another 6.2% on income up to the cap. Self-employed people pay the full 12.4%.
Officials said notices about the cost-of-living adjustment will go out in December. The agency promised an improved notice this year that uses “plan and personalized language” and gives exact dates and dollars for the new benefits.
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