Many retirees rely heavily on Social Security benefits to cover their expenses during retirement. In fact, a 2024 Gallup survey revealed that 88% of current retirees consider their SSI payments essential. Moreover, 60% of these retirees reported that these checks are a major source of income.
Maximizing your Social Security benefits can be a smart way to ensure greater financial security during your retirement years. There are several strategies you can use to increase your benefits, including delaying the age at which you begin to collect them, increasing your earnings, or taking advantage of spousal or divorce benefits.
How to increase your Social Security benefits in 2025
Sometimes, getting more money from Social Security can be as simple as waiting for the new year’s adjustments to take effect. In 2025, certain changes in the Social Security program may lead to an increase in your benefits without requiring any additional effort on your part.
A new cost-of-living adjustment (COLA)
Each year, the Social Security Administration (SSA) announces a cost-of-living adjustment, commonly known as COLA, designed to help beneficiaries maintain their purchasing power in the face of inflation. For 2025, a new COLA is expected, with details to be released in the coming months.
According to a September 2024 estimate from The Senior Citizens League, the COLA for 2025 may be around 2.5%. While this percentage is lower than in previous years, even a modest increase like this can make a noticeable difference. If the forecast holds, retirees receiving an average monthly payment of $1,900 could see an increase of approximately $48 per month starting in January 2025.
Increase in the maximum benefit
Social Security sets a cap on the maximum benefit an individual can receive. In 2024, this cap is set at $4,873 per month. However, this maximum amount can fluctuate from year to year due to various economic factors.
While there have been years when the maximum benefit decreased (such as between 2018 and 2020), the general trend is for the maximum benefit to rise slightly each year. To qualify for the maximum benefit, you must meet three main requirements: work for at least 35 years, delay collecting benefits until the age of 70, and consistently earn the maximum taxable income subject to Social Security. In 2024, that taxable income limit is set at $168,600 per year.
Although most workers don’t reach this income threshold, those who do may see an increase in the maximum benefit available in 2025.
Higher earnings limit for those still working
For individuals who continue working after they begin receiving Social Security benefits, there is an earnings limit that, if exceeded, can temporarily reduce their payments. This is known as the earnings test and primarily affects those who haven’t yet reached full retirement age.
Each year, the earnings limit is adjusted, allowing beneficiaries to earn more before their benefits are reduced. For example, in 2024, if you’re earning $30,000 per year and haven’t yet reached full retirement age, your benefits would be reduced by $3,840 annually, or around $320 per month. However, in previous years, that same amount of earnings would have led to an even larger reduction.
These reductions are only temporary, and once you reach full retirement age, your benefits will be recalculated. With the earnings limits expected to rise in 2025, individuals who continue working may be able to keep more of their benefits, even while still earning income from employment.