Even small changes to Social Security, which helps millions of seniors make ends meet, can have a big effect on your monthly budget. The most anticipated change may be the cost-of-living adjustment (COLA), which will give Social Security recipients a 2.5% raise in 2025.
People who are disabled and work would make about $39 a month, while people who are retired and work would make about $48 a month. There are some important changes to know about as we move into the new year. This is because Social Security is more than just CPI.
These are the 3 most important changes to Social Security that will impact beneficiaries in 2025
The cost of Medicare premiums will rise
In 2025, the monthly Medicare Part B premium will go up from $174 to $185. This is one of the most important changes. It may not seem like much to pay an extra $10.30 a month, but over time, it can help lower your monthly bill.
Also, for most people, their Medicare premiums will be taken directly out of their Social Security payments. You will not get a big raise to begin with because the COLA for next year is already the lowest it has been in a few years. The rise will be even smaller, though, because Medicare will take an extra $10.30 out of your payment.
The earning test limit will increase for American workers
There is good news for people who work and get Social Security: starting in 2025, you will be able to make more money before your benefits are cut. People who get Social Security benefits in addition to income from a job but have not reached full retirement age (FRA) are the only ones who have to follow the earnings test rules.
If you make more than the limit, your benefits will be temporarily lowered until you reach your FRA. With the start of a new earnings test in January 2025, both of these levels will go up:
| Earnings Test Limit 2025 | Earnings Test Limit 2024 | Social Security benefit reductions | |
| If beneficiaries do not reach their FRA in 2025 | $23,400 per year | $22,320 per year | For every $2 beyond the limit, there is a $1 reduction. |
| If beneficiaries reach their FRA in 2025 | $62,160 per year | $59,520 per year | For every $3 beyond the limit, there is a $1 reduction. |
Let us say you are 65 years old, your FRA is 67, and you make $25,000 a year from part-time work. This year, your income would be $2,680 more than the limit. This means that your Social Security benefits will be cut by more than $100 per month. But things will be different next year. With the same income, you will only make $1,600 more than the new limit.
This means that your monthly checks will drop by about $67. Because of this, the earnings test limits may have a big effect on your benefits in the short term, even though these cuts are only temporary (your checks will be looked at again at your FRA). As long as your limits are high, having more money today can go a long way.
The US federal agency will increase the maximum monthly benefit
Next year, the biggest Social Security check will go from $4,873 to $5,108. However, please remember that you have to meet certain requirements to get this money. First, people who want to get benefits must have worked for at least 35 years.
This is because your benefit is based on the average of your wages over the 35 years when you made the most money. Also, you must consistently make more than the maximum taxable earnings limit, which starts in January and will be $176,100. This is the most money that is taxed by Social Security.
The last step to getting the most money is to delay the start of your benefit until you turn 70 years old. A person aged 62 will get a maximum of $2831 a month by 2025, even if they meet all the other requirements.
A person aged 67 will get a maximum of $443 a month. Social Security will change every year, and many of these changes will have an immediate effect on your finances. As 2025 gets closer, you can start making plans for your money by keeping an eye on what is coming up.