In 2025, Social Security will implement various modifications that will affect millions of individuals who are retired. As of August 2024, over 51 million retired individuals received a Social Security payment. A significant portion of these retirees rely on their monthly payments to cover their expenses.
The Social Security Administration plans to adjust benefits in 2025 through a cost-of-living increase (COLA). These COLAs represent annual raises linked to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The forthcoming COLA for 2025 will depend on the percentage increase in the CPI-W recorded from July to September of 2024.
The Senior Citizens League projects a 2.5% surge in benefits for 2025. Additionally, Social Security’s Full Retirement Age (FRA), the minimum age for claiming full benefits, is set to rise in 2025.
Individuals born during the final eight months of 1958 will achieve FRA at the age of 66 years and 8 months. Those born in January or February of 1959 will reach FRA at 66 years and 10 months. Retired workers who opt to claim Social Security benefits prior to reaching FRA could face a reduction in their benefits if their income surpasses specific thresholds.
These thresholds are referred to as the Retirement Earnings Test (RET) exempt limits. For the year 2025, the lower RET limit is anticipated to rise to $23,280.
The impact of Social Security’s COLA increase on retirees
The upper limit is expected to increase to $61,800. The initial Social Security payouts for 2025 will start being disbursed in January. The timing of your payment is dependent on your birth date.
If your scheduled payment date coincides with a weekend or a holiday, you will receive your payment on the preceding weekday. Additionally, the Social Security Administration is introducing modifications aimed at assisting low-income communities in accessing increased funds via the Supplemental Security Income (SSI) program. Starting Monday, applicants for SSI will not be denied benefits due to support received from friends, family, or their community.
The agency will no longer factor food into its “In-Kind Support and Maintenance” assessment. This adjustment is expected to enhance SSI monthly payments by approximately $131 for over 90,000 recipients. Furthermore, the agency will extend a rental subsidy exception to all SSI applicants across the nation.
This modification could result in an increase of around $132 to the monthly SSI payments for roughly 41,000 individuals. In addition, SNAP benefits will be included in the various forms of public assistance evaluated by the agency’s policy. This inclusion will enable a greater number of individuals to be eligible for SSI and lessen the reporting load.
These updates will assist an increased number of people in qualifying for SSI, with many receiving higher payments as a result. SSI benefits are available to both adults and children with disabilities, as well as to individuals aged 65 and older who have limited income and resources.
