Every time announcements are made about a new legislation or proposals are made about changes that affect Social Security payments, handfuls of elderly people begin to fear that this will endanger their financial well-being, after working all their life, anything that affects their monthly benefit is going to have a significant impact on their quality of life.
Social Security protects beneficiaries from many risks: it ensures them a minimum level of income during old age, and allows those who have suffered throughout their entire life to expect a level of comfort and dignity during retirement.
Therefore, it is important to learn more about the upcoming changes that the Social Security Administration (SSA) plans to implement and how it will affect the income that retirees receive month by month.
Changes in Social Security Benefits That Retirees Can Anticipate Starting in 2025
More than 50 million retirees are recipients of Social Security checks to cover their living expenses and keep up with inflation.
According to a Gallup poll, about 88% of retired people depend on Social Security income to some degree, and 60% indicate that it is their main source of income.
For this reason, the new changes in Social Security benefits, annual increases, taxes, and possible cuts due to shortages that could impact the federal pension system in 2035 could generate some effects on retirees’ paychecks.
Are Cuts Coming After Your Benefits?
Although it is still too early to confirm whether benefit cuts could be generated, retirees should take into consideration additional sources of income so as not to rely solely on Social Security checks.
However, for now, we would like to focus on three important changes, which have already been confirmed by the Social Security Administration, which are going to take effect in 2025.
Social Security checks are going to increase less than expected in recent months. There have been various expert forecasts about the cost of living adjustment (COLA) for the year 2025.
Projections range from 2.5% to 3%; however, the final projection of the Senior Citizens League (TSCL) indicated that the most likely COLA increase for the year 2025 will be close to 2.63%.
If this percentage takes effect in October, beneficiaries will receive Social Security checks plus a 2.63% increase starting in January 2025.
With a COLA increase of 2.63%, these will be the Social Security checks available by program:
| Retirement benefits (plus 2.63%) | Survival benefits (plus 2.63%) | SSDI benefits (plus 2.63%) | SSI benefits (plus 2.63%) |
| On average: $1,950
Age 62: $2,781 Age 67: $3,923 Age 70: $5,001 |
On average: $1,505
Individual: $1,773 2 children: $3,653 |
On average: $1,577
Blind recipients: $2,658 Maximum payment: $3,923 |
On average: $716
Physical persons: $968 Couples: $1,452 Essential person: $484 |
More Social Security Taxes for Beneficiaries Next Year?
The National Retirement Institute learned that 74% of adults mistakenly believe that workers pay Social Security taxes on all of their income.
The law currently in effect limits payroll tax revenue to $168,600 in 2024, with adjustments for prior years based on changes in the national average wage index.
Additionally, the Social Security Board of Trustees projects a taxable maximum of $174,900 in 2025, which will result in $391 more in Social Security taxes for those who work, an employee who earns more than $174,900 will have $10,844 reduced your paycheck next year due to the 6.2% tax rate, while $10,453 will be deducted from your compensation this year, resulting in a difference of $391.