The Consumer Price Index (CPI-W) is used by the Social Security Administration (SSA) to figure out the 2025 COLA. The CPI-W from the third quarter of 2023 to the third quarter of 2024 is all that SSA needs.
Based on this math, the COLA will only go up by 2.5%, which is a little less than the average of 2.6% over the last ten years. People who work worry about tax rates. Both the employee tax rate (7.65%) and the self-employment tax rate (15.30%) have stayed the same.
Some important facts about the 2025 COLA raise for Social Security
People who make a lot of money are always interested in finding out the highest amount of money that is taxed. It has gone up again, and in 2025 it will be $176,100, up from $168,000. That means that once you make that much, you won’t have to pay taxes on any extra money you make.
The worker needs 40 work points, which is equal to ten years of work, to get Social Security. From $1,730 to $1,810, you will need to earn more to get one point in 2025. In this way, 2025 has also changed the covering quarter.
The Retirement Earnings Test Exempt Amounts are another thing that Social Security has changed. The new most you can earn before you retire (FRA) is $23,400 a year, up from $22,320. As of soon, the amount for the year a worker hits FRA will be $62,160.
2025 COLA and the Disability Levels for Social Security
The Substantial Gainful Activity (SGA) limits have also been raised by Social Security. In 2025, it will be $1,620/mo for people who are not blind. It used to be $2,590 a month for blind people, but now it’s $2,700. The most you can earn during the Trial Work Period is now $1,160 per month.
In 2024, the most that can be earned at Full Retirement Age is $3,822. If prices go up again in 2025, it will cost $4,018 a month. The highest SSI payment has also gone up.
- The most a single person can get from SSI is $967 a month after the cost of living increase.
- The most a married couple can get in SSI is $1,450 after COLA.
- SSI has limits on how much money a person can have ($2,000) or a couple ($3,000).
- SSI students are not eligible for this: $2,350 per month.
- SSI students are not eligible for this: $9,460 per year
Source: https://www.ssa.gov/disability, https://www.ssa.gov/
