Everyone has to deal with change, and while it can bring about bad things, it can also bring about good things. Even though a lot of people do not like change, it does not always have to be seen as a bad thing.
This is especially true when it comes to Social Security, where some possible changes in 2025 could be very helpful. Here are three good things that could happen next year with Social Security.
1. An Increase in Social Security Benefits
A cost-of-living adjustment (COLA) is often made to Social Security benefits every year. This is done to help recipients keep their buying power as living costs rise.
But these changes are not always made; a COLA only happens when prices go up from one year to the next.
Even though inflation may not have been as high as it was for most of 2022, the cost of living has still been going up every year in 2024. Because of this, recipients may see a rise in their checks next year.
The exact amount is not yet known, though, because it is based on data from the third quarter of the previous year.
The Senior Citizens League, a nonpartisan group that works on problems that affect seniors, recently made a prediction that the COLA for 2025 could be around 2.57 percent.
It is a little less than the 3.2% rise that was given at the beginning of 2024, but it is still an increase in benefits. Any raise, no matter how small, is good news for people who depend on Social Security to pay for basic things.
2. The Maximum Monthly Benefit Should Rise
There is a salary cap that limits how much of a person’s earnings are taxed by Social Security. This means that not all workers pay taxes on all of their income.
This limit is changed every year, so there is also a maximum amount of money that a person can get each month.
The most a person can get from Social Security each month is $3,822 if they retired at full retirement age in 2024. But this number is likely to go up in 2025.
This change to the maximum payout is especially important for people who make a lot of money and may be eligible for Social Security’s top payment.
If someone in this job wants to retire in 2025, the raise will mean a bigger monthly benefit, which will make them feel safer about their finances.
3. A Likely Increase in the Earnings-Test Limit
Many people think it is impossible to work and get Social Security benefits at the same time, but it is doable.
Some people, especially those who have not hit full retirement age yet, can not do everything.
The earnings-test cap tells the government how much a person can make and still get full benefits. If you make more than this amount, some of your Social Security income will be taken away.
People who have not hit full retirement age yet can earn up to $22,320 a year in 2024. The upper limit is set at $59,520 for people who will reach full retirement age within the year.
In 2025, these limits are likely to go up. This will give people more freedom to make extra money without worrying about losing their benefits.
It is important to remember that if benefits are taken away because the person makes too much money, that money is not lost forever.
When the person reaches full retirement age, the amounts that were withheld are added back into the monthly payments. This way, the beneficiaries will finally get those funds back, even if they keep working.
A Positive Outlook for Social Security in 2025
It depends on the situation, change can either bring problems or chances. The changes that are likely to happen to Social Security in 2025 look like they will be good.
As a result of the COLA, benefits are expected to go up for most people. The maximum benefit will also go up for people who make more money, and the earnings-test limit will go up for people who work while getting benefits.
All of these changes point to a better future for seniors who depend on Social Security to meet their needs next year.
