Millions to Benefit from Social Security Adjustment in 2025! Find out who qualifies for maximum Social Security retirement benefit!
Starting in January 2025, millions of Social Security recipients will see a 2.5% cost-of-living adjustment (COLA), as announced by the Social Security Administration. With this adjustment, the maximum Social Security benefit for someone retiring at full retirement age will increase to $4,018 per month, up from $3,822 in 2024 – a $196 rise.
However, most retirees won’t see such a large bump. On average, monthly Social Security retirement benefits will go up by about $50. The average benefit for retired workers will rise from $1,927 to $1,976 in 2025, reflecting a $49 increase.
Who Qualifies For The Maximum Social Security Retirement Benefit?
According to Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities, people who have had maximum earnings their entire working career can get this type of benefit. Unfortunately, only a “very small number of people” fall into this category, he added. To qualify for the maximum benefit, workers must have consistently earned wages that meet or exceed the taxable maximum for at least 35 years.
“Very few people start out at age 21 earning the maximum level”, Van de Water noted.
In 2024, workers and employers each contribute a 6.2% payroll tax to Social Security, up to a taxable maximum of $168,600 in earnings. For self-employed individuals, that tax rate is 12.4%. In 2025, the taxable maximum will rise to $176,100.
How Can You Maximize Your Social Security Benefits?
Some beneficiaries are receiving more than $4,000 per month, but this is typically because they delayed claiming their benefits until age 70, according to Jim Blair, vice president of Premier Social Security Consulting and a former Social Security administrator. Waiting until 70 ensures the highest possible benefit, he added.
If you claim Social Security as early as age 62, your benefits will be permanently reduced. Waiting until full retirement age – 66 or 67 – will provide you with 100% of the benefits you’ve earned. For each year you delay claiming benefits beyond full retirement age, up to age 70, your benefit increases by 8%. This means that by waiting from age 62 to age 70, you could see a 77% increase in your monthly benefits.
Blair advised setting up an online My Social Security account to review your benefit estimates and earnings history. Since your earnings determine your benefit amount, it’s crucial to verify that the information is accurate. If any errors are found, you should contact the Social Security Administration to correct them.