The New Year is quickly approaching, and so are the upcoming Social Security adjustments. While many people believe that the Social Security program never changes, it is really modified on a regular basis to keep up with changing times.
The upcoming changes will have an impact on the approximately 70 million Americans who are enrolled in one of the five programs operated by the Social Security Administration (SSA), the independent government agency in charge of handling benefits.
According to the SSI’s Office of Retirement and Disability Policy, 70.6 million persons received benefits from SSA-administered programs in 2022, including 5.6 million new beneficiaries.
The Social Security Administration (SSA) administers Survivor, Family, Supplemental Security Income (SSI), Retirement, and Disability. If we continue to study the data, the average age of disabled worker recipients in 2022 was 55.6, and 55 percent of SSI beneficiaries were female.
The agency stated that 85 percent of SSI users got compensation due to disability or blindness. While the data may be out of date, they help us understand why the changes are so significant, as they affect some of society’s most vulnerable people.
A rise in Social Security benefits
Every year, benefits get a cost-of-living adjustment (COLA), which is designed to guarantee that payments stay up with inflation and continue to support beneficiaries without sacrificing quality of life. The increase applies to all SSA programs beginning January 1. With one exception.
According to the SSA, “the latest COLA is 2.5 percent for Social Security benefits and SSI payments.” Social Security benefits will increase by 2.5 percent beginning with the December 2024 benefits, which will be paid in January 2025.
Federal SSI payout levels will also increase by 2.5 percent beginning in January 2025. Because the regular SSI payment date is the first of the month and January 1 is a holiday, SSI payments for January are always made at the end of December.”
Other changes to the program
The COLA is not the only change that the program will face in 2025; one of the most contentious changes that the program undergoes each year is the increase of the maximum taxable earnings cap. Only a percentage of income is subject to Social Security taxes, and the ceiling for 2024 is set at 168,600. Because all of the caps are increasing in 2025, the maximum taxable earnings cap will be set at 176,100.
Even though many people will dislike the increase, there is a benefit to paying more. The highest Social Security benefits in 20025 are likewise increasing, with the maximum payout at full retirement age going from $3,822 in 2024 to $4,018 in 2025. The program’s maximum payout amount will likewise increase, from $4,873 in 2024 to $5,108 in 2025.
Changes to Medicare
Even though the Medicare program is handled by the Centers for Medicare & Medicaid Services rather than the Social Security Administration, the two programs are inextricably intertwined because they serve the same populations. One of the perks of Social Security is that you can have your Medicare Part B premiums deducted directly from your benefits, so any changes to the rates are crucial to know about.
This is a change that will occur in 2025: Medicare Part B rates will increase from $174.70 per month in 2024 to $185 per month in 2025. This will have a significant impact on many retirees, particularly those with lesser incomes who will see a smaller boost.
For example, the average Social Security payment in 2024 is $1,907, which will grow by around $49 when the COLA is applied. This means that with the increases in Medicare Part B premiums, the increase will be closer to $39.