Social Security beneficiaries will receive a 2.5% increase in their benefit checks starting January 1, 2025. This annual cost-of-living adjustment is the lowest since 2021, reflecting decreasing inflation rates.
However, certain pensioners may see more significant changes due to new legislation. The Social Security Fairness Act eliminates two provisions that reduce benefits for individuals with public pension income. These provisions include the Windfall Elimination Provision and the Government Pension Offset.
The bill aims to provide higher benefit payments to approximately 2.5 million beneficiaries, potentially moving the trust fund depletion date six months closer. Financial advisors caution that this may affect future benefits but assure current recipients there is nothing to worry about.
In other changes, the maximum taxable earnings for Social Security payroll taxes will rise to $176,100 in 2025, and the retirement earnings test will see a slight increase. Additionally, annual out-of-pocket Medicare Part D drug costs will be capped at $2,000, with insulin costs also capped at $35 per month.
Starting January 6, the Social Security Administration is requiring appointments for local office services, such as obtaining Social Security cards. Individuals are directed to try online or automated telephone services first, but vulnerable individuals can still receive in-person service.
Source: https://www.cnbc.com/2025/01/04/social-security-and-medicare-in-2025-here-are-the-changes-to-expect-.html