The beginning of a new year heralds a season of change and it is a time when a lot of individuals opt to change jobs or adjust their healthcare plans with the hope to have a better quality of life.
Among these personal shifts, people also look forward to navigating the changes implemented by the government. For both retirees and active workers, there are several major updates related to Social Security that demand attention this year including the following five changes.
The Social Security Administration has introduced a 2.5% cost-of-living adjustment that first applies to the benefits for December 2024. However, since benefits are disbursed the month following their due, recipients will get their initial checks showing an increase beginning this month.
To be eligible for 2025 Social Security work credits, workers need to earn a bit more. A total of 40 credits is essential to be eligible for retirement benefits along with a maximum of four credits achieved each year is also required.
In 2025, some workers may find themselves contributing more to Social Security payroll taxes because of an increase in the taxable wage base. Taxes applied to only the first $168.600 of earnings in 2024, but it will rise to $176,100 in 2025.
For retirees who are still working while getting Social Security benefits before reaching the full retirement age, the earnings threshold will increase in 2025.
This year, the full retirement age for individuals who were born in 1959 will be set at 66 years and 10 months. This age has been gradually increasing over recent years and will stabilize next year at 67 for those who were born in 1960 and later.
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