Hundreds of thousands of retirees and other beneficiaries in Iowa are expected to see an increase in their Social Security benefits in 2025.
In October, the Social Security Administration announced it would increase benefits by 2.5% through 2025 as a cost-of-living allowance (COLA).
Officials said Social Security retirement benefits will increase by an average of about $50 per month starting in January.
“Social benefits and SSI payments will increase in 2025, helping tens of millions of people keep up with spending even as inflation begins to cool,” Social Security Commissioner Martin O’Malley said in an October press release.
Over the past ten years, the COLA increase has averaged approximately 2.6%, with a maximum of 8.7% in 2023. The COLA was 3.2% in 2024.
Nationally, nearly 68 million Social Security beneficiaries will receive the 2.5% adjustment. The increased payments to nearly 7.5 million people receiving SSI will begin on December 31, 2024.
Here’s a look at Social Security in Iowa.
How many people in Iowa receive Social Security benefits?
According to Social Security, there were 531,390 retirees claiming Social Security in Iowa as of December 2023.
Another 72,000 people received social benefits, benefits also went to 36,000 widows and parents, 12,500 spouses and 36,000 children.
What age do you have to be to get Social Security retirement benefits?
You can start receiving your Social Security benefits as early as age 62. However, benefits are reduced if you start receiving them before “full” retirement age.
You can see how your benefits will change based on your age on the SSA website.
What is the Social Security payment schedule for 2025?
Those receiving Supplemental Security Income benefits are paid on the first of the month. If the first falls on a weekend, benefits will be paid the Friday before. This will lead to several months with two payments in 2025:
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The February benefit will be paid on January 31
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The March benefits will be paid out on February 28
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The June benefit will be paid on May 30
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The November benefits will be paid out on October 31
The pension benefits are paid out based on your date of birth. If your date of birth falls on:
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1st-10th: Benefits are paid on the second Wednesday
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11th-20th: The benefit is paid on the third Wednesday
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21st-31st: The benefit is paid on the fourth Wednesday
How will the social security retirement age change?
The full retirement age has changed over the years and is increasing for people in the younger age groups.
For example, if you were born between:
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1943-54: Full benefits began at age 66.
If you delay taking benefits from full retirement age until age 70, your benefit amount will increase.
How can I view my Social Security benefits online?
People can set up text or email alerts when a new message — such as their COLA notice — is waiting for them in my Social Security, according to Social Security.
Visit www.ssa.gov/myaccount to get started.
Will Medicare and other benefits change?
Information about 2025 Medicare changes is available at www.medicare.gov. For Social Security beneficiaries enrolled in Medicare, the 2025 benefit amount should be available through my Social Security Message Center.
How does Social Security determine the COLA?
The Social Security Act determines how the COLA is calculated.
The Social Security Act ties the annual COLA to the increase in the consumer price index for urban wage earners and white-collar workers, as determined by the Department of Labor’s Bureau of Labor Statistics.
How does the 2025 COLA compare to other years?
Social Security lists annual increases dating back to 1975. That required Congress to approve increases, which did not happen annually.
This year’s COLA is the smallest since January 2021, when it was just 1.3%.
Lowest COLAs:
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1.3%: 1987, 1999 and 2021
Highest COLAs:
Can I earn money besides social security?
Yes, but if you earn more than $62,160, you may have to pay taxes on your earnings on that amount.
People who reach their “full” retirement age in 2025 will be limited to $62,160. Social Security deducts $1 from benefits for every $3 earned above $62,160 until the month the worker reaches “full” retirement age.
However, there is no limit on income for employees who are of “full” retirement age or older for the entire year.
How much of my paycheck is taxed to help fund Social Security?
Adjustments that come into effect each January are based on increases in average wages. Based on that increase, the maximum amount of income subject to Social Security taxes will increase from $168,600 to $176,100.
Employers and employees each pay 6.2% of wages, while self-employed people pay 12.4% up to that amount.
Total revenues, including interest, from the combined OASI and DI trust funds in 2023 were $1.351 trillion ($1.233 trillion from net payroll tax contributions, $51 billion from benefit taxes, and $67 billion in interest).
Does Iowa Tax Social Security Benefits?
No, Iowa does not tax Social Security. The federal government taxes certain social security benefits.
Starting in 2023, Iowa will stop imposing income taxes on retirement benefits such as 401(k)s, pensions, annuities and individual retirement accounts. Farmers are also eligible for certain tax benefits if they are 55 years or older, have farmed for ten years and are retired.
This article originally appeared in the Des Moines Register: How much will Social Security payments change for Iowans in 2025?
