Hundreds of thousands of retirees and other beneficiaries in Iowa are set to see increases to their Social Security payments increase in 2025.
In October, the Social Security Administration announced it would increase benefits by 2.5% in 2025 as a cost of living allowance, or COLA.
On average, officials said, Social Security retirement benefits will increase by about $50 per month starting in January.
“Social Security benefits and SSI payments will increase in 2025, helping tens of millions of people keep up with expenses even as inflation has started to cool,” Commissioner of Social Security Martin O’Malley said in an October release.
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Over the last decade the COLA increase has averaged about 2.6%, with a high 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. Increased payments to nearly 7.5 million people receiving SSI will begin on Dec. 31, 2024.
Here’s a look at Social Security in Iowa.
How many people in Iowa receive Social Security payments?
As of December 2023, Social Security said there were 531,390 retirees drawing Social Security in Iowa.
Another 72,000 people were receiving Social Security disability, benefits also went to 36,000 widows/widowers 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 retirement benefits as early as age 62. However, benefits are reduced if you begin taking them prior to “full” retirement age.
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You can review how your benefits will change based on your age at SSA’s 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 are paid the Friday before. That will lead to a few months with two payments in 2025:
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February benefits will be paid on Jan. 31
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March benefits will be paid on Feb. 28
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June benefits will be paid on May 30
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November benefits will be paid on Oct. 31
Retirement benefits are paid based on your birth date. If your birth date falls on the:
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1st-10th: Benefits are paid on the second Wednesday
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11th-20th: Benefits are paid on the third Wednesday
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21st-31st: Benefits are paid on the fourth Wednesday
How does the Social Security retirement age change?
Full retirement age has changed over the years and increases for people in younger age groups.
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For instance, if you were born between:
If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase.
How can I see my Social Security benefits online?
People can set up text or email alerts when there is a new message — such as their COLA notice — waiting for them in my Social Security, Social Security said.
To get started, visit www.ssa.gov/myaccount.
Will Medicare and other benefits change?
Information about Medicare changes for 2025 is available at www.medicare.gov. For Social Security beneficiaries enrolled in Medicare, the 2025 benefit amount should be available via my Social Security’s Message Center.
How does Social Security determine the COLA?
The Social Security Act provides for how the COLA is calculated.
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The Social Security Act ties the annual COLA to the increase in the Consumer Price Index for Urban Wage Earners and Clerical 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. Prior to that, Congress had 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:
Highest COLAs:
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14.3%: 1980
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11.2%: 1981
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9.9%: 1979
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8.7%: 2023
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8%: 1975
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7.4%: 1982
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6.5%: 1978
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6.4%: 1976
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5.9%: 1977 and 2022
Can I make money in addition to Social Security?
Yes, but if you make more than $62,160 you may have to pay taxes of earnings over that amount.
People reaching their “full” retirement age in 2025 are limited to $62,160. Social Security deducts $1 from benefits for each $3 earned over $62,160 until the month the worker turns “full” retirement age.
However, there is no limit on earnings for workers who are “full” retirement age or older for the entire year.
How much of my paycheck is taxed to help fund Social Security?
Adjustments that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax is slated to increase to $176,100 from $168,600.
Employers and employees each pay 6.2% of wages, while the self-employed pay 12.4% up to that amount.
Total income, including interest, to the combined OASI and DI Trust Funds amounted to $1.351 trillion in 2023 ($1.233 trillion from net payroll tax contributions, $51 billion from taxation of benefits, and $67 billion in interest).
Does Iowa tax Social Security benefits?
No, Iowa does not tax Social Security. The federal government does tax some Social Security benefits.
Starting in 2023, Iowa stopped charging income tax on retirement benefits like 401(k)s, pensions, annuities and individual retirement accounts. Farmers are also eligible for certain tax breaks if they are 55 years or older, farmed for 10 years and are retired.
This article originally appeared on Des Moines Register: How much are Social Security payments changing in 2025 for Iowans?