The 2025 Social Security COLA Social Security recipients receive a 2.5% COLA starting in January 2025. Social Security paid the average retired worker $1,925.46 per month in October, so the COLA will raise it to $1,974.
Formula for Social Security benefits Social Security "bend points" are changing, but the formula isn't. In the Social Security formula, your 35 highest-earning years are indexed for inflation and averaged, and your monthly average earnings are multiplied by 90%, 32%, and 15%.
These percentages remain the same each year, but the bend points—the amount of money they apply to—change. Average indexed monthly earnings (AIME) formula for 2025 entrants: 90% of first $1,226. 32% of $1,226–$7,391. 15% of AIMEs over $7,391.
Maximal Social Security benefit Inflation-related adjustments raise the maximum Social Security benefit. Retirement at full Social Security age in 2025 will max out at $4,018 per month. Given that most people don't start collecting Social Security at full retirement age, consider this:
The maximum monthly benefit for a 62-year-old retiree in 2025 is $2,831. Benefits max out at $5,108 per month at 70.
Donations and benefits Changes apply to working people and those about to start collecting Social Security. The contribution and benefit base will rise to $176,100 in 2025 from $168,600 in 2024.
Many call this the "Social Security taxable maximum earnings," because the 6.2% Social Security tax on employers and employees only applies to this level of income.
It also affects benefit calculation because it is the maximum amount of money that can be used to calculate AIME, as discussed in the formula section.
Earnings while collecting Social Security Finally, Social Security earnings test limits change in 2025. Without full retirement age, you can only earn a certain amount of money while receiving Social Security benefits. Two components make up the earnings test:
If you retire after 2025, up to $1,950 in monthly earnings is exempt. Above this threshold, $1 in benefits is withheld per $2 in excess earned income. If you retire in 2025, up to $5,180 per month is exempt, and $1 is withheld for every $3 earned above this amount.