Total change in Social Security as of this date – Write down everything you need to know, retiree

Approximately, Social Security is directed to a 96.7% of adults between the ages of 60 and 89. Even though the ordinary benefit per month for workers who are retired was just $1,920 this past Agustus 2024, Social Security is a large support of many people’s income.

In reality, 50% of people aged 65 and above are given by the program half of their total salary of it. As an approximation, 25% of these individuals receive 90% or more of their income from Social Security.

Considering the importance of Social Security, it may come as a useful help that the Social Security Administration has announced the end of its COLA (cost-of-living adjustment) growth for the coming year. In the meantime, it is certainly higher, perhaps not quite as high as beneficiaries might have hoped.

Below, we explain what retirees should know about the change in Social Security benefits at the beginning of 2025. Pay attention, because there are some aspects that will be different from what was established.

2.5% benefit increase

Next year, Social Security benefits and Supplemental Security Income (SSI) payments will increase. This increase will be 2.5% for nearly 73 million Americans. If we break it down, that is more or less $50 more per month.

You’ll be able to get about $1,968 – 2.5% of $1,920 – if your current Social Security bill is $1,920 per month when it starts in January. If you receive SSI, those payments will increase on Dec. 31, 2024.

In fact, the COLA increase in 2024 was 3.2%. It’s balanced out at about 2.6% over the past 10 years.

Advantages of Increase and Inflation

If 2.5% is not considered a large percentage, the main plan is to not lag behind inflation. For the 12 months ending September 2024, the normal inflation percentage was 2.4%.

Hypothetically, the 2.5% growth will be part of the inflation going into 2025. This illustrates that the benefit amount will keep up with the increased cost of living.

Taxable income will increase

At the beginning of January, there will be some other changes to Social Security. In particular, the maximum taxable earnings will increase from $168,600 to $176,100. This won’t be as important as it is for current retirees, but those nearing retirement age should be aware of this change.

Currently, the Social Security tax rate is 12.4%, which is split 6.2% for the employee and 6.2% for the employer. With this change, employees will pay up to $10,918.20 in 2025, compared to the $10,453.20 they will receive. The employer will have to pay the other the amount of $10,918.20.

Remember that individuals who are self-employed will continue to pay the full 12.4% on their own. This fact means that they will have to pay $21,836.40 a year in Social Security tax. However, this tax will only apply to the first $176,100 of someone’s income.

Notices go out in December

Expect to receive a notice of your final benefit amount as early as the beginning of December 2024, if you receive Social Security. In contrast to previous years, the COLA statement will have a more esay design and should be freely accessible to any user.

If you want to learn more

First, you can track the COLA notice online if you have a My Social Security account. This is faster than waiting for the notice to arrive in the mail. You can also sign up for email or text alerts.

Medicare is set to change in 2025, so check out Medicare.gov for more information. If you have both Social Security and Medicare, you can access the message center for both accounts to track your new benefit amount. The update will begin at the end of November.

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