People who are currently getting Social Security benefits probably know about the changes that will happen by 2025. The program does change every year, albeit in small ways, so people who are used to dealing with changes are no longer surprised.
People who join the Social Security Administration this year might not know as much about how the programs it runs work or about the changes they have to make every year to stay up to date.
Here are some of the changes that are coming in 2025
Cost of living Adjustment of Social Security benefits and Medicare
A cost-of-living adjustment (COLA) is made to benefits every year to make sure that recipients don’t lose the ability to buy things and can keep up with their current standard of living. The CPI-W from the third quarter of the year was used to figure out this year’s COLA, which is 2.5%.
This small increase can help seniors because it means that inflation is finally going down. And, despite what most people think, it’s in line with other increases seen over the last ten years, averaging 2.6%, which is only 0.1% less than the norm.
If you’re not sure what that means, it means that the average monthly Social Security retirement benefits will increase by $48. For handicapped workers, it will go up by $39.
Sadly, benefits aren’t the only thing going up. If the 2% COLA doesn’t seem enough to some, the fact that Medicare payments are also going up, especially Part B, which is going from $174.70 a month to $185 will make it even worse. Medicare payments are taken out of Social Security income before they reach users, so the rise will be less for most of them.
But there are other changes that happen when the new year starts. As they do almost every year, Medicare fees are going up from $174.70 per month to $185. The rise in Social Security payments will be lessened by that extra tax.
Source google.com
The earnings test limit is increasing
These are wonderful news for those who continue to earn money while getting retirement benefits. These workers are subject to what is known as the Earnings Test Limit, which implies that any income earned above a specific amount reduces their benefits. How much depends on whether or not you reach full retirement age in 2025.
Earning limitations for people who will not reach full retirement age in 2025 are $23,400, with a $1 reduction for every $2 over the maximum applied to benefits. For people turning full retirement age in 2025, the yearly exempt amount is $62,160, with benefits reduced by $1 for every $3 over the limit.
Higher maximum benefit
Every year, the Social Security Administration increases the maximum benefit amount to cover all forms of benefits. The most well-known is the retirement pension, which will rise to $5,108 per month in 2025 from $4,873 in 2024.
To receive this maximum benefit, you must meet stringent qualifying requirements, including working at least 35 years and regularly earning at or above the maximum taxable limit, which is set at $176,100 next year. To receive the maximum payout, recipients must delay benefits until they reach the age of 70.
For those who began receiving benefits earlier, the maximum monthly amounts are smaller. At age 62, the maximum is $2,831, while those starting at age 67 can get up to $4,043. Delaying benefits continues to provide major financial advantages.
Also See:- U.S. retirees to get a new payment of $1,927 from Social Security today, or in 7 days
