Key Facts Alabamians Need to Know About the 2025 Social Security COLA Increase

Disclosure: State of Alabama-based writer. This article is a work from cited sources for informational purposes and is used with permission. No affiliate links are included.

As the Social Security Administration (SSA) implements its 2025 Cost of Living Adjustment (COLA) increase, Alabamians should be aware of several important updates to retirement, disability, and survivor benefits.

According to the agency's COLA fact sheet:

Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2023 through the third quarter of 2024, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 2.5 percent COLA for 2025. Other important 2025 Social Security information is as follows:

Here’s what you need to know about the COLA increase.

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Earnings Limits for Retirees Below Full Retirement Age (FRA): If you are under the Full Retirement Age (FRA) and still working, the SSA allows you to earn up to $23,400 annually without reducing your benefits. If you exceed this limit, your Social Security payments may be temporarily reduced. This cap applies to any Alabamian under FRA who is receiving Social Security benefits while continuing to work.

Earnings Limits for Those Reaching FRA in 2025: For Alabamians who will reach FRA in 2025, the annual earnings limit increases to $62,160. Once you reach the month of FRA, the earnings limit no longer applies, and you can work without affecting your Social Security benefits.

Average Retirement Payments in 2025: In 2025, the average Social Security retirement payment will rise to $1,976 per month. For couples, the average monthly payment will be $3,089, providing increased financial security for Alabama retirees.

Survivor Benefits for Widowed Parents and Individuals: Widowed Alabamians raising children will receive substantial support through survivor benefits. For widowed mothers or fathers with two minors in the household, the average benefit in 2025 will be $3,761 monthly. Widows or widowers living alone will receive an average payment of $1,832 per month.

Earnings Limits for Social Security Disability (SSDI) Recipients: For Alabamians receiving SSDI due to a non-blind medical condition, you can gross up to $1,620 per month without losing your benefits. If your disability is related to blindness, you can earn up to $2,700 while continuing to receive monthly SSDI payments.

Average Disability Payments for Workers and Families: Disabled Alabama workers will receive an average monthly payment of $1,580 in 2025. For those with a spouse and one or more children, the total household benefit will average $2,826 per month, offering additional financial support for families impacted by disability.

Trial Work Period for Disabled Workers: If you are on disability and attempt to return to work, SSA allows you a Trial Work Period. Any month in which you earn over $1,160 will count as one of the nine months allowed within a 60-month timeframe for this program. This gives disabled Alabamians an opportunity to test their ability to work without immediately losing their benefits.

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