Every month, and year after year, the Social Security Administration (SSA) distributes monthly benefits to more than 72 million citizens in the United States, which means that any modification or change in its structure could significantly affect the future of beneficiaries.
This is especially true for seniors who rely on these payments to cover their expenses and enjoy their golden years. Although it may seem like a modest or limited amount, Social Security has been crucial in helping seniors pay their bills and strengthen their financial stability.
Here are the upcoming changes and how they might impact you, depending on the program you qualify for.
Increase in Benefits in Proportion to the Cost of Living
To prevent older people from losing purchasing power, it is proposed to increase benefits in proportion to the increase in the cost of goods and services. One of the most significant changes that could impact all Social Security beneficiaries is the cost of living adjustment, known as COLA.
According to recent estimates, this adjustment could be between 2.6% and 3.2%, although the official figure will be determined later this year.
Changes to Social Security for Retired Workers in 2025
Increase in Payroll Taxes for High-Income People
Starting in 2025, people with higher incomes will have to pay the 12.4% Social Security payroll tax on all earned income between $0.01 and $168,600. This tax will fund more than 90% of the program. However, wages and salaries that exceed the maximum taxable earnings limit of $186,000 will be exempt from these taxes. This limit is expected to be adjusted annually along with the National Average Wage Index (NAWI).
Increase in the Maximum Limit of Taxable Profits
Due to the increase in prices of goods and services measured by the NAWI, the maximum taxable profit limit is expected to exceed $168,600 in 2025. Every dollar earned by the 94% of American workers earning less than this limit goes to Social Security, while the 6% of high-income workers could face higher payroll taxes next year.
Increase in the Maximum Social Security Payment
In 2025, the maximum monthly benefit for retired workers is also expected to increase. Currently, benefits at full retirement age are capped at $3,822, an increase of $195 from 2023. This increase is expected to continue, albeit slightly. Only about 2% of retired workers are eligible for this maximum payment, and they must meet certain criteria:
- Have worked for at least 35 years.
- Have reached or exceeded the maximum taxable income limit during the last 35 years.
- Waiting until your full retirement age (FRA) to claim benefits.
- Stricter Eligibility Requirements
To receive Social Security benefits, it is necessary to obtain work credits, not determined by place of birth or citizenship. Forty lifetime work credits are required, with a maximum of four credits per year. In 2024, the maximum of four credits is obtained if wages and salaries total $6,920, since the minimum income level for these credits is $1,730. This threshold is expected to increase slightly next year.
Changes to Social Security for People with Disabilities in the Upcoming Year
Increase in Income Thresholds for Disability Benefits
In April, approximately 7.25 million workers were receiving long-term disability benefits from Social Security. Disabled workers have a limit on the amount of monthly income they can earn without losing their benefits. In 2024, disabled but not blind workers will be able to earn up to $1,550 a month without having their benefits revoked, an increase of $80 from 2023.
For visually impaired workers, the limit will be $2,590 per month, an increase of $130 over the previous year. In 2025, assuming a slight decrease in inflation, the income limit for non-blind applicants is projected to exceed $1,600 per month, while for blind beneficiaries it could approach $2,700 per month.
