In April, nearly 51 million retired-worker beneficiaries received an average Social Security check of $1,915.26, totaling almost $23,000 annually. Although this may not seem substantial, Social Security plays a crucial role in supporting retirees financially, helping them manage their expenses.
More than two decades of Gallup polling reveal that between 80% and 90% of retirees rely on Social Security income to cover some of their expenses. Therefore, any changes to the program are of significant interest to current and future beneficiaries.
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Although the Social Security Administration (SSA) will announce official adjustments in October, here are six anticipated changes for 2025:
1. Modest Increase in Cost-of-Living Adjustment (COLA)
The most anticipated Social Security change each year is the cost-of-living adjustment (COLA), designed to offset inflation. In recent years, COLAs have exceeded the two-decade average of 2.6%. Increases were 5.9% in 2022, 8.7% in 2023, and 3.2% in 2024. For 2025, the COLA is expected to be around 2.7%.
If the estimated 2.7% COLA holds, the average retired worker’s monthly check could increase by about $52, with workers with disabilities and survivor beneficiaries seeing increases of $42 and $41, respectively.
2. Increased Payroll Tax for High Earners
High earners are likely to face higher payroll taxes in 2025. In 2024, earned income up to $168,600 is subject to a 12.4% payroll tax, which funds over 90% of Social Security’s revenue. The maximum taxable earnings cap typically rises with the National Average Wage Index (NAWI). As NAWI increases, so will the earnings cap, meaning high earners will contribute more.
For the 94% of workers earning below the cap, this change won’t matter. However, the 6% of high earners will see a higher payroll tax burden.
3. Increase in Maximum Monthly Benefit
High earners might also see an increase in their maximum monthly benefit. In 2024, the maximum monthly benefit at full retirement age is $3,822, up $195 from 2023. While the 2025 increase may be smaller, it will still exceed $3,822.
About 2% of retired-worker beneficiaries receive this maximum benefit, requiring them to meet specific criteria: working at least 35 years, reaching the earnings cap in those years, and waiting until full retirement age to claim benefits.
4. Higher Disability Income Thresholds
Approximately 7.25 million workers received long-term disability benefits through Social Security in April. Disabled workers can earn up to a certain amount without losing benefits. In 2024, non-blind disabled workers can earn up to $1,550 per month, and blind workers up to $2,590.
With moderated inflation, these thresholds might increase to $1,600 for non-blind and $2,700 for blind beneficiaries in 2025.
5. Higher Early Filer Withholding Thresholds
Early filers—those receiving benefits before full retirement age—face penalties, including a permanent reduction in benefits and potential withholdings based on earnings. In 2024, benefits are withheld for earnings over $22,320 annually ($1,860 monthly) for those not reaching full retirement age that year, and over $59,520 annually ($4,960 monthly) for those who will.
With rising inflation and COLAs, these thresholds will likely increase, allowing early filers to retain more earnings without benefit reductions.
6. Tougher Qualification for Benefits
Qualifying for Social Security benefits requires earning work credits, with 40 needed for a retired-worker benefit. In 2024, one work credit equals $1,730 in earned income, meaning $6,920 earns the maximum four credits annually. This threshold is expected to rise modestly in 2025.
