Major Social Security Changes Coming in 2025—What You Need to Know!

Social Security Changes: The full retirement age (FRA) will once again be updated by the Social Security Administration. In fact, it is gradually increasing and will reach 67 for people born in 1960 or later. For example, if you were born in 1959, your full retirement age is 66 and 10 months. However, if you were born in 1958, it is 66 and 8 months.

In 2025, people born between May 2, 1958, and February 28, 1959, will reach the full retirement age. FRA means the time when you can receive 100% of your benefits, without any deductions, but also without any delayed credits.

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Social Security Announces New Taxable Maximum

The administration will raise the current taxable maximum ($168,600) to $176,100. This means that if your income is that high, you may have to pay more taxes.

For your information, the taxable maximum is the amount you earn when you stop paying taxes to the SSA, even if you exceed that limit. So, only income less than this new taxable maximum will be taxed.

To be eligible for benefits, you will still need 40 work credits at 62, but you will need more income to get one work credit. It will be $1,810, up from $1,730 previously. You will have to earn at least $7,240 to get 4 per year.

Social Security Announces New Social Security Earnings Test

If you work before FRA and receive Social Security benefits, there are also new thresholds for that. For example, the new amount will be $23,400 per year. The good news is that SSA taxes will remain the same. You will still have to pay 6.2%, just like your employer does.

In most cases, starting January 6, 2025, you will have to make an appointment to visit Social Security offices for various services. Another important change that will affect Social Security will be the Medicare premium.

In fact, the standard premium will increase to $185 in 2025. The current amount is $174 in 2024. So, if you want to keep it, you will have to pay a little more. Finally, there will be a 2.5% COLA increase for Social Security benefits and SSI payments. This will equate to an average of $49 for Social Security and $38 for SSDI recipients.

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Conclusion

In 2025, several important changes will be implemented by the Social Security Administration. Changes such as the increase in the full retirement age, the increase in the taxable maximum, and new limits in the Social Security earnings test will have a significant impact on beneficiaries. In addition, the increase in Medicare premiums and the COLA increase are also worth noting.

Beneficiaries should be fully aware of these changes and adjust their financial plans accordingly. Make sure you get the necessary work credits and take full advantage of your Social Security benefits. If you need any help, contact the Social Security Administration and get information about your rights and benefits.

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