As we head into 2025, millions of Americans relying on Social Security and Supplemental Security Income (SSI) will see changes to their benefits as a result of the annual Cost-of-Living Adjustment (COLA). These yearly increases are designed to help beneficiaries keep up with the rising cost of living, ensuring these critical programs maintain their value over time.

This year’s COLA increase of 2.5% is not as high as previous years, but will still result in public benefits increases across Social Security, SSI, Medicaid, and Medicare. Let’s walk through what changes to expect so you’ll know how it may affect you or your loved ones.

KEY PAYMENT ADJUSTMENTS

Several adjustments will go into effect as a result of the COLA increase in 2025. Here are some specific numbers that may be relevant: 

• New Federal SSI payment standard is $967/month for an individual and $1,450/month for a couple.
• New Social Security Disability Insurance (SSDI) thresholds are $1,620/month (non-blind), $2,700/month (blind), and $1,160/month (Trial Work Period).

• Estimated average monthly Social Security retirement payment for individuals is $1,976 per month.

• Annual gift exclusion limit for 2025 is $19,000 and the same limit applies to annual ABLE Account contributions.

For more details about the 2025 COLA changes, refer to the official fact sheet from the Social Security Administration.

MEDICAID ADJUSTMENT

In regards to Medicaid, the Spousal Impoverishment Figures will see their own changes for this new year:

• The new minimum Community Spouse Resource Allowance (CSRA) is $31,584 and the maximum is $157,920.
• The minimum monthly maintenance needs allowance is $2,555 ($3,192.50 for Alaska and $2,937.50 for Hawaii).
• The maximum monthly maintenance needs allowance is $3,948. 

MEDICARE ADJUSTMENTS

Medicare premiums will also see a slight increase in 2025 from the 2024 rates. 

• Part B premium: $185.00 (from $174.70)
• Part B deductible: $257 (from $240)
• Part A deductible: $1,676 (from $1,632)
• Co-payment for hospital stay days 61-90: $419 (from $408/day)
• Co-payment for hospital stay days 91 and beyond: $838/day (from $816)
• Skilled nursing facility co-payment days 21-100: $209.50/day (from $204)

Note that these numbers are for low-income beneficiaries; you can find more details about Medicare changes on the Centers for Medicare & Medicaid Services website.

The Cost-of-Living Adjustment is an important step in helping beneficiaries maintain financial security as prices rise, but it’s also a reminder to stay informed about changes to public benefits. Whether you’re managing your own finances or assisting a loved one, it’s always important to be aware of any adjustments and understand how they may  impact your financial planning for the year ahead.

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