Today is the middle of the second half of the year, and already everyone is talking about how Social Security will change in 2025. The government, the public, and present retirees are all worried about different kinds of uncertainty, so this is a very important issue. The Social Security Administration, or SSA, is in charge of many different services that work together to make up Social Security.
The goal of these programs is to keep Americans safe from things that could make it hard for them to support themselves, like poverty. People who get help from it should know, though, that the government doesn’t see it as a separate organization.
So, it gets money from both the federal government and public funds, which is a problem because it’s something that Congress often debates. As more proof of how important it is to the economy, consider the fact that for many people, Social Security payments are their only source of income and, by extension, their only way to buy things.
So, if the amount given isn’t enough, the cost of Social Security that the government has to pay for will go up. As a citizen, retiree, or worker, you need to know what will happen to Social Security in 2025, be able to share your concerns, and talk to your government about how it should be run. Keep reading.
What is the future of Social Security regarding the elections?
This is one of the most talked-about topics right now. All of this could change when the presidential candidates are chosen, and how Americans vote will depend on the balance of power and the plans for running Social Security. Trump has said that he will not cut payments or raise the retirement age. He has also proposed that seniors should not have to pay any income tax on amounts over $25,000, which would be covered by Social Security.
This could be good for seniors’ benefits, but if other parts of the government don’t cut back at the same rate, it will put stress on the system by making the debt bigger. But Kamala Harris has said that the system will be protected and made stronger, but she hasn’t given any specific ideas.
But as a senator, she helped pass a bill to make it last longer. If he wins, this could mean that he wants to raise taxes on Social Security for people with higher incomes.
Social Security benefits will be updated at the end of the year due to the cost of living adjustment
Social Security is updated every year so that people who get it can have enough money to enjoy retirement or pay for their basic needs. This is done with a method called cost of living adjustment (COLA). Every year, the average of the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers) for the third quarter of the year (July, August, and September) is used to make this index.
This score shows how financially stable families are with at least one wage-earning or office worker. Since inflation has been going down, the expected rise is 2.6%, which is less than the 8.7% rise that was forecast for 2023. This means that there is less chance of losing purchasing power.
Will Social Security be viable in 2025?
No, Social Security will not be able to stop paying all of its benefits until at least 2025. The SSA, on the other hand, says that money might run out as early as 2035. Because fewer babies are being born, fewer people are joining the workforce, which lowers the amount of taxes paid into Social Security.
This means that the system has to use more of the principal (the main part of the tax money it gets) than just the interest earned to make monthly payments to its beneficiaries.