3 Major Social Security Changes Coming to 2025

3 Major Social Security Changes Coming to 2025

(DailyDig.com) – The Social Security Administration (SSA) undergoes an annual review of any changes needed to the program that serves over 50 million retirees. On June 10, the SSA released a plan that will fund Social Security to protect the government’s commitment to deliver payments without cuts and improve its customer service.

In a recent Gallup survey, 88% of retirees stated that they depend on their payments from Social Security to some extent. Sixty percent said that their payments were a significant source of their income.

According to President Biden’s proposed budget for 2025, $15.4 billion, an increase from $1.3 billion from the level in 2023 for discretionary spending. The SSA’s announcement, issued on March 11, said that the budget will allow them to make critical investments to fund the program.

The June 10 plan released by SSA includes some changes to the program for 2025. The importance of providing payments that are in line with inflation and the average wage level is information they believe all retirees and upcoming retirees should be aware of. The plan underscored three crucial points:

  1. Starting in 2025, Social Security payments will receive a cost of living adjustment (COLA).

Each year, SSA determines the COLA using the Consumer Price Index (CPI), released during the third quarter of the previous year. The middle of October will see the release of the CPI for the third quarter. Current trends predict a 2.7% increase.

  1. In 2025, some employees who have Social Security taxes deducted from their paychecks may see an increase in the amount withheld.

Currently, the law limits taxable income to $168,600. Estimates suggest that the maximum amount of income subject to tax will rise to $174.900.

  1. Certain Social Security recipients will have some payments withheld in 2025.

If the recipients are still working prior to retirement age or if their earnings exceed the exempt amounts, SSA will withhold some of their payments. Once the worker reaches full retirement age, the withholding stops, and they eventually repay the withheld amount.

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