6 Social Security Changes For Social Security 2025


Beneficiaries could anticipate six changes in 2025, even if the Social Security Administration (SSA) won’t make any official announcements until the second week of October.

Benefits from Social Security should be slightly increased by the cost-of-living adjustment (COLA)

The cost-of-living adjustment (COLA) is without a doubt the most anticipated Social Security “change” that occurs annually. The best way to conceptualize COLA is as the SSA’s inflation-accounting mechanism. Stated differently, in order to prevent seniors from losing purchasing power, Social Security benefits should ideally increase in proportion to increases in the cost of the goods and services they buy. The tool for that job is COLA.

High earners will almost certainly owe more in payroll tax

A second anticipated development for 2025 is that wealthy individuals will probably be opening their wallets a little wider. In 2024, the 12.4% payroll tax levied by Social Security will apply to all earned income, including wages and salaries, but excluding investment income, which falls between $0.01 and $168,600. Over 90% of the funds the program raises and distributes to qualified recipients come from this tax. Payroll tax is not applied to wages and salaries that exceed the maximum taxable earnings cap of $168,600.

Social Security’s maximum monthly benefit is likely to increase, once again

High earners may pay more in payroll taxes in 2025, but they also might see an increase in their maximum monthly retired worker benefit if they continue to make high wages throughout their lives. Indeed, the maximum amount of benefits that the program will pay out at full retirement age has been established.

Disability income ceilings ought to rise

Approximately 7.25 million workers were receiving Social Security long-term disability benefits as of April. Disabled workers are only permitted to take home a specific amount of their monthly earnings in order to keep these benefits.

Workers who are disabled but are not blind may make up to $1,550 per month in 2024 without having their benefits revoked, an increase of $80 from 2023. In the meantime, blind impaired workers can earn $2,590 per month without their benefits ending—a $130 monthly increase over 2023.

A hike in the early filer withholding criteria is anticipated

Not just beneficiaries who work with disabilities may be able to keep more of their wages in 2019 without having to give up part or all of their Social Security benefits. There are a few penalties for early filers, which is defined as anyone who is getting a retired-worker pension before they reach full retirement age.

Early filers may be subject to the retirement earnings test in addition to a permanent decrease in their monthly benefit of up to 30%, contingent on their birth year and age upon claim. The retirement earnings test gives the SSA the authority to withhold some or all of your benefits based on your earned income.

It’s expected that getting Social Security benefits will get harder over time

Social Security payments aren’t something you get just because you were born in the country or became a citizen, despite what you may have heard or read online. Traditionally, work credits are used to earn benefits. To be eligible for a retired worker benefit, you must accrue 40 of these lifetime work credits; you may not earn more than 4 credits per year.

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