Social Security’s 2025 COLA: What Spousal Beneficiaries Need to Know
The announcement of next year’s cost-of-living adjustment (COLA) for Social Security is a major event for many Americans. With everyday costs like groceries, housing, and medical care continuing to rise, this adjustment is critical, particularly for retirees who depend on these benefits. The 2025 COLA has been set at 2.5%, a figure that highlights the ongoing challenge of inflation.
Though experts often argue that the COLA may not fully keep pace with inflation, any increase is generally seen as a positive development. For those receiving spousal benefits, it’s important to understand how this rise will influence their monthly payments.
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Eligibility for Social Security Spousal Benefits
The Social Security program offers spousal benefits that allow individuals to receive monthly payments based on their partner’s work history. This situation is especially helpful for individuals who have not accumulated substantial personal earnings, such as stay-at-home parents.
To qualify for spousal benefits, a claimant must meet certain criteria: the primary spouse must already be receiving benefits, and they must have been married for at least one year. Additionally, one of the following conditions must apply:
- Be at least 62 years old.
- Be caring for a child under 16.
- Be caring for a child with a disability that began before age 22.
Individuals who are divorced may also claim spousal benefits if their marriage lasted at least 10 years.
Impact of the 2025 COLA on Spousal Benefits
The 2.5% COLA for 2025 will result in an approximate increase in spousal benefits, directly influencing the amount received by those who qualify. Individuals claiming spousal benefits can receive up to 50% of their primary spouse’s monthly benefit if they reach their full retirement age.
Here’s an overview of full retirement ages based on birth year:
For those claiming spousal benefits at their full retirement age, below is a table illustrating how monthly benefits would be affected by the 2.5% COLA.
| Primary Claiming Spouse’s Benefit | Spousal Benefit | Primary Claiming Spouse’s Benefit with COLA | Spousal Benefit With COLA |
|---|---|---|---|
| $1,000 | $500 | $1,025 | $512.50 |
| $1,500 | $750 | $1,537.50 | $768.75 |
| $2,000 | $1,000 | $2,050 | $1,025 |
| $2,500 | $1,250 | $2,562.50 | $1,281.25 |
| $3,000 | $1,500 | $3,075 | $1,537.50 |
Table and calculations by author.
Timing Your Claim: Spousal Benefits and Full Retirement Age
Like standard benefits, spousal benefits can be claimed beginning at age 62. However, claiming before your full retirement age results in a reduced monthly payout. The penalty for claiming spousal benefits early is stricter than for standard retirement benefits.
If you claim benefits early, your spousal amount decreases by 25/36 of 1% for each month before your full retirement age, up to 36 months. After that, the reduction continues at a rate of 5/12 of 1% per month.
For example, if your full retirement age is 67 and you claim your benefit at 62, expect a 35% reduction. If you wait until age 64, the reduction is 25%. In comparison, retirees would face reductions of 30% and 20% for the same early claims.
It’s also important to note that while standard benefits increase by 2/3 of 1% for each month you delay claiming after full retirement age, these additional credits do not apply to spousal benefits. Therefore, if eligible for spousal benefits, it’s advisable to claim them once you reach full retirement age.
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