Millions of older adults rely on Social Security as their primary source of income. A small change to the program can significantly impact your monthly budget. In 2025, the cost-of-living adjustment (COLA) will increase by 2.5%, with average retirees seeing an additional $48 per month and workers with disabilities receiving a raise of roughly $39 per month.
However, there are other changes coming up that you should be aware of. Starting in 2025, Medicare Part B premiums will rise from $174.70 to $185 per month, affecting millions of Americans who rely on the program for healthcare costs. For those with automatic deductions from their Social Security checks, this increase may not seem significant due to next year’s COLA being the smallest in several years.
Another change to watch is the increasing earnings test limit. If you’re still working while receiving Social Security benefits, this new limit will reduce benefit reductions for some individuals. The earnings test limit affects those under full retirement age who earn income from a job and collect Social Security. Starting January 2025, these limits will increase.
For those under full retirement age, the new earnings test limits are as follows:
– $23,400 per year (yearly) if you won’t reach your full retirement age
– $22,320 per year (yearly) with benefit reductions for every $2 over the limit
– $62,160 per year (yearly) if you will reach your full retirement age
– $59,520 per year (yearly) with benefit reductions for every $3 over the limit
These changes can have a significant impact on your benefits in the short term. While they are only temporary, understanding these updates is crucial to making informed decisions about your financial planning.
Source: https://finance.yahoo.com/news/3-huge-social-security-changes-104500207.html