Social Security benefits have once again changed in line with inflation adjustments within the United States, so what is the average monthly payment for a retired worker in 2025 under the Trump administration?
To understand Social Security, we must understand how it’s funded. Monthly benefits are funded primarily through payroll taxes collected under the Federal Insurance Contributions Act (FICA) and the Self-Employment Contributions Act (SECA).
Employees and employers each contribute 6.2% of wages up to the annual Social Security Wage Base, while self-employed individuals pay the full 12.4%. These taxes form the primary revenue stream for Social Security.
The funds collected are directed into two trust funds: the Old-Age and Survivors Insurance Trust Fund, which provides benefits to retired workers and survivors of deceased workers, and the Disability Insurance Trust Fund, which supports disabled workers and their families.
Upon reaching the full age of retirement between 66 years old or 67 years old, depending on your year of birth, Americans can then claim back the money to fund their elderly years of life when they can no longer work as they once did.
It is worth noting that you can claim Social Security from the age of 62, but that it declines in total amount the earlier you begin to claim. The reduction is up to 30% at the maximum.
In 2025, the average monthly Social Security retirement benefit for a retired worker is $1976, due to a 2.5% Cost-of-Living Adjustment (COLA) applied to counteract inflation.
The maximum monthly benefit for those retiring at full retirement age has risen to $4018, up from $3822 in 2024.
Why is Social Security taxed?
In addition to payroll taxes, a portion of Social Security benefits is taxable for higher-income recipients, and the revenue from these taxes is also funneled into the trust funds.
This system operates on a pay-as-you-go model, where current workers’ payroll taxes fund the benefits of current retirees.
However an aging population and lower birth rates have raised concerns about the program’s sustainability. Projections forecast Social Security funding to begin running out from 2035.