Major changes are coming to Social Security in 2025, affecting both retirees and workers. While there are no policy changes, inflation-based adjustments will impact benefits, taxes, and more.
The biggest change is the annual cost-of-living adjustment (COLA), which will result in a 2.5% raise for beneficiaries starting with the December 2024 payment. This translates to an extra $48 per month for those receiving an average of $1,900 per month.
For full retirement age in 2025, the maximum possible benefit will be $4,018 per month ($48,000 per year), and for someone retiring at 70, it’s $5,108 per month ($61,300 per year).
The taxable maximum earnings limit is increasing to $176,100 in 2025, affecting Social Security tax. This change depends on wage growth.
If you receive benefits before reaching full retirement age, the earnings test limits will be $1,950 and $5,180, respectively, depending on your birth month. Any excess income may result in withheld benefits.
While these changes are significant, it’s essential to note that Social Security is expected to run out of money by 2034 unless adjustments are made. The president-elect’s views on Social Security may lead to future policy changes.
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Source: https://eu.usatoday.com/story/money/2024/12/07/social-security-largest-changes-2025/76758306007