Changes to the Social Security system are nothing new. Rules, eligibility criteria, and payment amounts have been changing over time, and this process is likely to continue in the future.
Some changes affect only select groups, while others apply broadly to all current and potential beneficiaries.
Entering 2025, it’s important to pay attention to two major changes. Even if you’re not a beneficiary right now, these changes may be important to your future plans.
Learn Here Social Security Retirement Age Change in 2025
1. Monthly benefit increase expected in 2025
2025 will bring a positive change for Social Security beneficiaries. The Social Security cost-of-living adjustment (COLA) will cause an increase in monthly benefits for all current recipients.
The annual COLA is intended to balance the effects of rising inflation. Whether it’s food, clothing, or housing, rising prices affect those who rely on fixed income sources the most. A 2.5% increase in monthly benefits will take effect in January 2025.
While this is lower than the average COLA since 1975, it also reflects a slowdown in inflation. This increase will bring relief to beneficiaries who are struggling with rising costs.
| Year | COLA |
| 2015 | 1.7% |
| 2016 | 0% |
| 2017 | 0.3% |
| 2018 | 2% |
| 2019 | 2.8% |
| 2020 | 1.6% |
| 2021 | 1.3% |
| 2022 | 5.9% |
| 2023 | 8.7% |
| 2024 | 3.2% |
2. Social Security tax will apply to more income in 2025
Most workers in the U.S. pay Social Security payroll taxes throughout their careers. If you have an employer, you and your employer split the 12.4% tax equally. That is, each pays 6.2%. Self-employed workers have to pay the full 12.4% tax.
Social Security’s wage base limit will increase in 2025. The limit has now been raised to $176,100, up from $168,600 in 2024. This means that people who earn more than this limit will now have to pay taxes on more income.
For example, if you earn $175,000 in 2024, $6,400 of your income would be tax-free. But in 2025, none of that same income ($175,000) will be tax-free because it’s within the new limit.
Apart from taxes, knowledge of the wage base limit is also important for those who want to receive the maximum monthly benefit of $5,108 in 2025. For maximum benefits, you must delay claiming until age 70 and earn income above the wage limit for 35 years.
Below are the wage base limits for previous years:
| Year | Wage Base Limit ($) |
| 2015 | 118,500 |
| 2016 | 118,500 |
| 2017 | 127,200 |
| 2018 | 128,400 |
| 2019 | 132,900 |
| 2020 | 137,700 |
| 2021 | 142,800 |
| 2022 | 147,000 |
| 2023 | 160,200 |
| 2024 | 168,600 |
Learn here $1404 SSDI Benefits Distributed by SSA for December
FAQ
What will the wage base limit be in 2025 for Social Security taxes?
The wage base limit for Social Security taxes in 2025 will be $176,100, up from the 2024 limit of $168,600. This means that income above this limit will not be taxed.
Will more income be subject to Social Security taxes in 2025?
Yes, in 2025, all of the income of workers who earn less than $176,100 will be subject to Social Security payroll taxes. More income will be subject to taxes than before.
Does the Social Security wage cap have any effect on benefits?
Yes, to get the maximum Social Security benefit ($5,108 per month in 2025), you must earn income above the wage cap for 35 years and delay claiming until age 70.