Good news for millions of Americans: Social Security payments reached their highest levels ever in 2025. If you receive Social Security or Supplemental Security Income (SSI), your monthly check got bigger this year thanks to a cost-of-living adjustment (COLA).
But are these increases enough to help with rising costs? And what does this mean for your housing budget? Let’s break down everything you need to know about the 2025 Social Security increases and how they might affect your finances.
What Changed in 2025?
The Social Security Administration applied a 2.5% cost-of-living adjustment to all Social Security and SSI benefits in 2025. This increase affected about 68 million Social Security recipients and 7.5 million SSI recipients across the country.
While 2.5% might sound small, it still means real money in your pocket. The average retired worker now receives about $50 more per month compared to 2024. That’s $600 extra per year – money that can help cover essential expenses like housing, food, and healthcare.
The timing of these increases was important too. Social Security recipients saw their higher payments starting in January 2025, while SSI recipients got their increase with their December 31, 2024 payment.
How Much More Money Are People Getting?
The exact amount of your increase depends on what type of benefits you receive. Here’s what different groups are seeing:
Retired Workers: The average monthly benefit went from about $1,927 to $1,976 – an increase of $49 per month.
SSI Recipients: If you’re single and receive SSI, the federal maximum increased from $943 to $967 per month. That’s $24 more each month.
Married Couples: If both spouses receive full Social Security benefits, they’re seeing about $75 more per month combined, going from roughly $3,014 to $3,089.
Maximum Benefits: For those who waited until age 70 to claim Social Security and earned the maximum during their working years, benefits increased from $4,873 to $5,108 per month.
These increases might seem modest, but they add up over time. For many people living on fixed incomes, an extra $50 or $75 per month can make a real difference in their ability to afford basic needs, including housing costs.
Why Do Social Security Payments Increase?
Social Security includes automatic cost-of-living adjustments to help benefits keep up with inflation. The government calculates these increases using something called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
Here’s how it works: Officials compare prices from July through September of one year to the same months the previous year. If prices went up, Social Security benefits increase by the same percentage.
For 2025, the math looked like this:
- Average CPI-W for July-September 2024: 308.729
- Average CPI-W for July-September 2023: 301.236
- The difference: 2.5%
This 2.5% increase is actually smaller than recent years. In 2023, benefits increased by 8.7%, and in 2024, they went up 3.2%. The smaller increase this year reflects slower inflation compared to the rapid price increases we saw in 2022 and 2023.
Additional Changes That Affect Your Money
Beyond the basic COLA increase, several other important changes took effect in 2025:
Higher Earnings Limits: If you’re still working while receiving Social Security, the amount you can earn without affecting your benefits increased. For people under full retirement age, the limit rose to $23,400 per year (up from $22,320 in 2024).
Increased Taxable Wage Cap: The maximum amount of earnings subject to Social Security taxes increased to $176,100 in 2025, up from $168,600 in 2024.
Work Credits: To earn a Social Security work credit in 2025, you need $1,810 in earnings, up from $1,730 in 2024.
These changes affect different people in different ways, but they’re all designed to keep the Social Security system current with economic conditions.
The Social Security Fairness Act: Extra Help for Some
Some Social Security recipients got an even bigger boost in 2025 thanks to the Social Security Fairness Act, which became law on January 5, 2025.
This law eliminated two rules that reduced benefits for public employees like teachers, firefighters, police officers, and federal workers who also had pensions from jobs that didn’t pay into Social Security.
About 2.5 million people were affected by these old rules. Starting in late February through April 2025, they began receiving:
- Higher monthly payments going forward
- Retroactive payments covering up to 15 months back to January 2024
- An average increase of about $360 per month, with some people seeing increases of $1,000 or more
If you worked in public service and had your Social Security reduced because of these rules, this change could significantly improve your financial situation.
Are the Increases Enough?
While any increase is welcome news, many seniors and disability recipients say the 2.5% boost isn’t keeping up with their actual living costs.
According to surveys, 71% of older adults believe their COLA doesn’t match their rising expenses. This makes sense when you consider that:
- Grocery prices are 27% higher than they were in 2020
- Healthcare and prescription drug costs continue rising faster than general inflation
- Housing costs, including rent and utilities, keep climbing in many areas
As Social Security Administration Commissioner Martin O’Malley acknowledged, “They’re not wrong… I’ve heard the stories and it is a struggle for seniors.”
This is especially challenging for people trying to afford housing on fixed incomes. With housing budget cuts affecting many assistance programs and new 2025 housing income limits potentially changing eligibility, every dollar counts.
What This Means for Your Housing Budget
If you’re struggling to afford housing costs, your Social Security increase can help, but it might not solve all your challenges. Here are some ways to make the most of your higher payments:
Budget the Extra Money Carefully: That extra $50 or $75 per month can help with rent, utilities, or other housing expenses. Consider setting up automatic transfers to a savings account for housing emergencies.
Look Into Housing Assistance: If you haven’t already, explore programs like Section 8 housing vouchers. Even if you’ve been denied Section 8 assistance before, changes in income limits or local availability might make you eligible now.
Review Your Overall Budget: With higher Social Security payments, you might qualify for different assistance programs or be able to afford slightly higher rent in a better location.
Looking Ahead: Future Changes
Looking ahead: there are concerns about Social Security’s long-term future. The Social Security trustees warn that the trust fund might not be able to pay full benefits by 2035 unless Congress takes action.
There’s ongoing debate about potential changes, including:
- Using different inflation measures that better reflect seniors’ spending
- Adjusting how benefits are calculated
- Changing tax policies to bring in more revenue
For now, though, your benefits are secure and higher than ever before.
What You Should Do Next
To make sure you’re getting all the benefits you’re entitled to:
- Check Your my Social Security Account: Log into your online account at ssa.gov to see your exact benefit amount and any notices about changes.
- Review Your December COLA Notice: The Social Security Administration mailed notices in December 2024 explaining your specific increase.
- Monitor Your Payments: Make sure your actual payments match what your notice says you should receive.
- Plan Your Budget: Factor your higher payments into your housing and living expense planning for 2025.
- Stay Informed: Keep up with news about Social Security changes that might affect you in the future.
The Bottom Line
Yes, your Social Security payments are officially higher than ever in 2025. The 2.5% increase means more money in your pocket each month, and some public service workers are seeing even bigger increases thanks to the Social Security Fairness Act.
While these increases help, many recipients still find it challenging to keep up with rising costs, especially housing expenses. The key is making the most of your higher benefits while exploring other resources and assistance programs that might help you afford a safe, stable place to live.
Remember, every situation is different. Use the Social Security Administration’s official calculators and your personal account information to understand exactly how these changes affect your specific benefits. With careful planning and the right resources, your higher Social Security payments can be an important part of maintaining affordable housing.
For more information about housing assistance and budgeting help, visit the Social Security Administration website or contact your local Social Security office.