Most older adults rely on Social Security to some extent in retirement. A whopping 88% of current retirees say they depend on their benefits, according to a 2024 poll from Gallup, while 60% of that group say their checks are a major source of income.
Maximizing your benefit is a smart move, and there are plenty of options to increase your payments -- from waiting a few years to claim to boosting your income to taking advantage of resources like spousal or divorce benefits .
Sometimes, though, earning more in benefits is as simple as waiting for a new year. There will be a few changes coming to the program starting in 2025, some of which could earn you higher payments without lifting a finger.
Image source: Getty Images.
1. A new cost-of-living adjustment (COLA) is coming
Next month, the Social Security Administration will announce the COLA for 2025. The most recent estimate for next year's adjustment is 2.5%, according to a mid-September forecast from nonprofit advocacy group The Senior Citizens League.
If that prediction is accurate, it will be the lowest since 2021 -- which saw an adjustment of just 1.3%. However, even small COLAs can still boost benefits.
The average benefit amount among retired workers is roughly $1,900 per month, according to August 2024 data from the Social Security Administration. If the COLA does indeed land at 2.5%, the average retiree would see their benefits increase by around $48 per month starting in January 2025.
2. The maximum benefit will likely increase
There is a cap on how much you can collect from Social Security, and in 2024, that maximum benefit is $4,873 per month.
The maximum payment doesn't always increase from year to year. Between 2018 and 2020, for instance, it steadily decreased from $4,647 per month to $4,561 per month, and there was also a slight dip from 2022 to 2023. However, in most years, there has been at least a slight increase in the maximum possible benefit.
| Year | Maximum Monthly Social Security Benefit |
|---|
| 2014 | $4,479 |
| 2015 | $4,501 |
| 2016 | $4,598 |
| 2017 | $4,535 |
| 2018 | $4,647 |
| 2019 | $4,609 |
| 2020 | $4,561 |
| 2021 | $4,628 |
| 2022 | $4,705 |
| 2023 | $4,700 |
| 2024 | $4,873 |
Data source: Social Security Administration. Table by author.
To earn the highest possible payments, there are three requirements you'll need to meet: work for at least 35 years, delay claiming benefits until age 70, and consistently reach the maximum taxable earnings limit. This limit is the highest income subject to Social Security taxes, and for 2024, it's $168,600 per year.
The average worker likely won't be on track to earn the max benefit , and that's OK. But if you're one of the few who can meet all three of these benchmarks, there could be a raise in store for 2025.
3. The earnings test limit will likely increase
For those who continue working after taking Social Security , your wages could be subject to the earnings test limit. If you're under your full retirement age and your earnings surpass a certain limit, your benefits will be temporarily withheld -- and the more you earn, the more severe the reductions will be.
The good news for 2025, though? These limits increase most years, meaning you can earn more before facing benefit reductions.
| Earnings Test Limit: 2022 | Earnings Test Limit: 2023 | Earnings Test Limit: 2024 | Benefit Reduction |
|---|
| Those under full retirement age | $19,560 | $21,240 | $22,320 | $1 for every $2 over the limit |
| Those reaching full retirement age this year | $51,960 | $56,520 | $59,520 | $1 for every $3 over the limit |
Data source: Social Security Administration. Table by author.
For instance, say you're under your full retirement age and earning $30,000 per year from your job. In 2024, that would amount to a reduction of $3,840 per year, or $320 per month. But back in 2022, assuming you're still earning $30,000 per year, that income would have led to a reduction of $5,220 per year, or $435 per month.
Now, these reductions are only temporary, and you'll start receiving adjusted payments once you reach your full retirement age. But in the meantime, higher earnings limits can help you keep more of your benefits if you continue to work.
While we won't know exactly what's in store for 2025 until next month, when the Social Security Administration releases the latest updates, it's likely that retirees will have a few opportunities for larger checks. And if you're relying on your benefits in retirement, every dollar counts.
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