Changes will be made to Social Security in 2025, including a reduction in the cost-of-living adjustment, an increase in the age at which individuals are eligible for full retirement benefits, and an increase in taxes for individuals with high incomes.
Social Security 2025: Prepare for Lower COLA and Increased Retirement Age-Impacting Retirees
According to The Motley Fool, in 2025, Social Security will change in ways that could affect both retirees and workers. The cost-of-living adjustment (COLA) for retirees is projected to be about 2.63%, which is less than in recent years. This is a big change. This is a raise, but it might not be enough to keep up with rising prices. Retirees may need to change how much they spend or look for other ways to make money.
As of 2025, people who turn 66 in 2025 will be able to retire at age 66 and 10 months. People born in 1960 or later will wait until they turn 67. People who are getting close to retirement need to make sure they plan well so they don’t get less money when they leave early.
Social Security 2025: Higher Income Limits Mean Increased Taxes for High Earners
There will also be changes for people who make a lot of money. In 2025, the income cap for Social Security taxes will go up from $168,600 to about $174,900 or $175,500. So, more of their salary will be taxed, which means they will get paid less each time. Workers and retirees should start getting ready for these changes now so that they don’t have any nasty financial shocks next year.