[US] Two big changes for Social Security payments in 2025

In the US, the Social Security Administration announces the annual cost-of-living adjustment ‘COLA’ every year. This year, in the wake of slowing inflation, a 2.5 per cent increase will be applied; smaller than the 3.2 per cent announced in 2023, MSN reports.

This adjustment affects all benefits paid out by the SSA to retired workers, their spouses and survivors as well as disabled workers and their family members. Adults and children with disabilities may also be eligible for Supplemental Security Income (SSI).

Beneficiaries will reportedly see the 2.5 per cent boost to their payments beginning with those disbursed corresponding to January 2025. But two further changes are coming next year.

The 2025 COLA will also affect the amount of taxable income on which Social Security taxes must be paid. Next year the maximum taxable amount will be $176,100.

To be eligible, recipients of Social Security payments will need to have earned at least 40 work credits, assuming they are not claiming on their spouse’s work history.

The maximum amount an individual can earn in a year is four credits, however, they have to have made a certain amount of money to do so. 

In 2024 the amount is $1,730 per credit, also called ‘quarter of coverage’, in 2025 that will reportedly increase to $1,810. Therefore low-income earners or part-time workers could potentially not receive the full four credits next year.

The Full Retirement Age in the US annually increases by two months for those born after 1955. This incremental pattern culminates in a Full Retirement Age of 67 for individuals born in 1960 and beyond.

Consequently, individuals born in 1958 will meet the eligibility criteria for Full Retirement Age in 2024 at 66 years and 10 months. They must be that age for a full month before beginning a claim without being penalised.

Those not yet ready to retire can increase their maximum Social Security benefits if they keep working until they are 70.

Source: MSN

(Links via original reporting)

In the US, the Social Security Administration announces the annual cost-of-living adjustment ‘COLA’ every year. This year, in the wake of slowing inflation, a 2.5 per cent increase will be applied; smaller than the 3.2 per cent announced in 2023, MSN reports.

This adjustment affects all benefits paid out by the SSA to retired workers, their spouses and survivors as well as disabled workers and their family members. Adults and children with disabilities may also be eligible for Supplemental Security Income (SSI).

Beneficiaries will reportedly see the 2.5 per cent boost to their payments beginning with those disbursed corresponding to January 2025. But two further changes are coming next year.

The 2025 COLA will also affect the amount of taxable income on which Social Security taxes must be paid. Next year the maximum taxable amount will be $176,100.

To be eligible, recipients of Social Security payments will need to have earned at least 40 work credits, assuming they are not claiming on their spouse’s work history.

The maximum amount an individual can earn in a year is four credits, however, they have to have made a certain amount of money to do so. 

In 2024 the amount is $1,730 per credit, also called ‘quarter of coverage’, in 2025 that will reportedly increase to $1,810. Therefore low-income earners or part-time workers could potentially not receive the full four credits next year.

The Full Retirement Age in the US annually increases by two months for those born after 1955. This incremental pattern culminates in a Full Retirement Age of 67 for individuals born in 1960 and beyond.

Consequently, individuals born in 1958 will meet the eligibility criteria for Full Retirement Age in 2024 at 66 years and 10 months. They must be that age for a full month before beginning a claim without being penalised.

Those not yet ready to retire can increase their maximum Social Security benefits if they keep working until they are 70.

Source: MSN

(Links via original reporting)