Positive Changes Coming to Social Security in 2025

Many retirees depend on Social Security for their monthly income, even with their personal savings. Exciting updates from the Social Security Administration are on the horizon for 2025, potentially increasing benefits starting January. Here are two key changes to watch.

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1. A 2.5% Cost-of-Living Adjustment

Every year, Social Security benefits can receive a cost-of-living adjustment (COLA). This increase helps recipients keep up with rising prices due to inflation.

This year, Social Security benefits saw a 3.2% COLA, but in 2025, the increase will be 2.5%. While it seems less generous, it can be viewed positively. The smaller increase suggests that inflation is moderating, which can be beneficial as you won’t feel the sting of rising costs as acutely.

It’s important to note that COLAs are not guaranteed each year. If inflation is stable or decreases, benefits may not increase. Thus, while a 2.5% COLA is not record-breaking, it still represents growth in your monthly checks.

2. Higher Earnings-Test Limit

Working during retirement is a great way to boost your income while staying active. You can collect Social Security benefits while working, but there are some limits if you’re below full retirement age.

In 2025, the earnings limit will increase, allowing you to earn more before your benefits are affected. You can earn up to $23,400 before any withholding occurs, a rise from $22,320 in 2024. Should you exceed this amount, $1 in benefits will be withheld for every $2 earned over the limit.

If you will reach full retirement age in 2025, your limit will be even higher at $62,160, up from $59,520 in 2024. For earnings above this threshold, $1 will be withheld for every $3 earned.

Positive Changes for Retirees

These updates could significantly enhance the financial situations of many older Americans. If you’ve hesitated to take on part-time work due to fears of losing benefits, now might be the perfect time to explore earning extra income without sacrificing Social Security.

The $22,924 Social Security Bonus You Might Overlook

If you’re like many Americans, you may feel behind on retirement savings. However, there are lesser-known strategies that could enhance your retirement income. For instance, one simple approach could potentially add $22,924 to your annual benefits. Learning to maximize your Social Security benefits can provide the security necessary for a confident retirement. Click here to find out more about these strategies.

View the “Social Security Secrets” »

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