Three Changes Coming for Social Security in 2025

Social Security's cost-of-living adjustment (COLA) for 2025 may disappoint beneficiaries. Projections suggest a 2.57% increase, down from 3.2% in 2024.

Inflation eased to 2.9% in July, driving the lower estimate. Will this modest bump keep pace with retirees' actual expenses?

Inflation's Impact: Are Prices Really Stabilizing?

Lower inflation doesn't equate to lower prices for essentials. Grocery and energy costs remain stubbornly high.

Housing expenses haven't eased as much as expected. Can seniors stretch their benefits to cover rising living costs?

Full Retirement Age: The Creeping Goal Post?

2025 sees full retirement age (FRA) increase to 66 years and 10 months. This affects those born in 1959.

FRA will reach 67 for those born in 1960 or later. How will this delay impact retirement plans across generations?

Early Retirement Penalty: A Steeper Price Tag?

Claiming benefits at 62 results in a permanent reduction. The penalty increases as FRA rises.

Early retirees could lose up to 30% of their full benefit. Is the freedom of early retirement worth the financial hit?

Social Security Credits: The Rising Bar?

Earning Social Security credits becomes more challenging in 2025. Workers need 40 credits to qualify for benefits.

The income required per credit increases annually. Will low-wage workers struggle to meet these new thresholds?

Wage Cap: Higher Earners, Bigger Tax Bills?

The Social Security tax wage cap will likely increase in 2025. 2024's cap stands at $168,600, up from $160,200 in 2023.

High earners may face larger Social Security tax bills. Could this change fuel debates about tax fairness?

Medicare Eligibility: Linked to Social Security Changes?

Social Security credits also determine Medicare eligibility. Changes in credit requirements could affect healthcare access.

Medicare enrollment age remains at 65 despite rising FRA. Will policymakers consider aligning these age thresholds?

Benefit Calculation: More Than Just Credits?

Earning 40 credits guarantees eligibility, not benefit amount. Retirement benefits depend on lifetime earnings.

The SSA uses the highest 35 years of earnings. How can workers maximize their future benefits today?

Inflation Protection: Is COLA Enough?

COLA aims to preserve purchasing power for beneficiaries. Recent years saw significant increases due to high inflation.

Lower COLAs may not offset cumulative price increases. Will retirees need to find additional income sources?

Future of Social Security: Sustainable or Strained?

Demographic shifts put pressure on the Social Security system. The trust fund is projected to deplete by 2034 without changes.

Policymakers debate various reform proposals. How will today's workers' benefits look in the coming decades?