What are the Changes to Social Security in 2025 and how will those changes affect me?

Changes are coming to Social Security in 2025

Here’s what you need to know about the changes for the new year:

   New Cost of Living Adjustment (COLA).

The purpose of COLA is to make sure that the purchasing power of Social Security and SSI benefits is not diminished by inflation. Cost of living is based on the Department of Labor’s Consumer Price Index (CPI-W) and determined by taking the average CPI-W reading from the third quarter of the current year (July – September) and comparing it with the CPI-W of the previous year. Inflation rises when CPI-W goes up and prices for goods and services increase. COLA helps offset these costs. If there is no increase in the Consumer Price Index, there is no increase in COLA. The cost-of-living increase in January 2025 is 2.5%.

---

  Social Security monthly benefits will increase.

In 2025, disabled workers will see their average monthly SSDI check increase by $43—from $1,537 (2024) to $1,580 (2025), and the average payment for a disabled worker, their spouse, and one or two children is estimated to be $2,826 (up from $2,720).

---

  In general:

	Before COLA	After COLA
Disabled worker, spouse and one or more children	$2,720.00	$2,826.00
All disabled workers	$1,537.00	$1,580.00

---

Payments to SSI beneficiaries will also rise with the average monthly payment for an individual increasing to $967 per month (up from $943 per month) and $1,450 per month for a couple (up from $1,415 per month).

It’s important to know that SSI beneficiaries’ resource limits (the amount a beneficiary’s countable resources are worth) will not change in 2025, remaining at $2,000 for an individual and $3,000 for a couple.

---

   Substantial Gainful Activity (SGA) will increase.

The Social Security Administration updates the monthly earnings threshold known as Substantial Gainful Activity (or SGA) each year. SGA is the amount of monthly income a beneficiary can earn before Social Security benefits will cease and depends on the nature of a person’s disability. In 2024, SGA for a blind person was $2,590 per month; and will increase to $2,700 per month in 2025. In 2025 a nonblind person can earn $1,620 per month (up from $1,550 per month in 2024). The threshold for a Trial Work Period or TWP will also increase. A Trial Work Period is an interval of time where a beneficiary attempts to return to work and earn some income, but may still collect Social Security benefits. The TWP for 2025 is $1,160 per month, an increase from $1,110 per month in 2024.

---

   The amount of earnings needed for Social Security credits increases.

To qualify for Social Security benefits, individuals must earn credits by working in a job that withholds Social Security taxes. Social Security bases these “work credits” on the amount an individual earns in any given year, using their earnings and work history to determine eligibility for disability benefits, retirement benefits, and survivor benefits. A person must earn 40 work credits over their lifetime to be eligible for Social Security retirement benefits, with a maximum of 4 work credits per year. Each year the amount of earnings needed for credits increases as average earnings levels increase. In 2025, one work credit will be awarded for every $1,810 (up from $1,730 in 2024); you can earn up to 4 credits per year, equivalent to $7,240 in income in 2025. The number of work credits you need to qualify for disability benefits depends on your age when your disability begins. Generally, a person needs 40 credits, 20 of which were earned in the last 10 years ending with the year your disability began. However, younger applicants may qualify with fewer credits.

---

   Changes to Medicare premiums and coverage.

Social Security beneficiaries who are enrolled in Medicare will see changes to premiums, coverage, deductibles and coinsurance amounts. Part A premiums will remain at $0 for most beneficiaries because they paid Medicare taxes while working. However, if you didn’t get premium-free Part A, you will pay up to $518 each month. If you don’t buy Part A when you’re first eligible for Medicare, usually when you turn 65, you might pay a penalty. Part B premiums will increase to $185 per month (up from $174.70 per month.) The annual deductible will also increase to $257 from $240. The average monthly premium for Medicare Advantage plans is projected to decrease by $1.23 in 2025, but officials at the Centers for Medicare & Medicaid Services (CMS) say that nearly 83 percent of enrollees will not see any increase in the monthly charges for their current plan next year. While most Medicare Advantage Plans include Plan D prescription coverage, for those who are not enrolled in those plans, the national average premium for Part D drug coverage in 2025 is expected to decrease to $46.50 (down from $53.95 in 2024) according to KFF, an independent provider of health policy research.

You will notice a change in your Social Security benefits whether you are retired or a person with a disability.

The Social Security Administration posts updates online for all beneficiaries who have a my Social Security account. You can sign up online to view changes and receive courtesy notifications at https://www.ssa.gov/myaccount.

Citations:

https://www.ssa.gov/cola/
https://www.ssa.gov/oact/cola/sga.html
https://www.ssa.gov/oact/cola/twp.html
https://www.usatoday.com/money/blueprint/retirement/maximum-social-security-benefit/
https://www.humana.com/medicare/medicare-resources/what-is-medicare-part-a
https://www.ssa.gov/benefits/disability/qualify.html