Social Security and Medicare Changes in 2025
Social Security adjustments are coming up starting January 2025. As if typical the increase in payment did not keep up with inflation last year. If you have not been keeping track of forth coming Social Security changes in 2025, here they are:
Starting in 2025, Medicare Part B premiums will increase from $174.70 per month to $185 per month. While an increase of $10.30 per month may not seem significant, it can chip away at your monthly payments.
Most people have their Medicare premiums deducted automatically from their Social Security checks. Because next year’s COLA is already the smallest in several years, you won’t see a significant raise to begin with. But with Medicare taking an extra $10.30 bite out of your payment, the increase will be even smaller.
The earnings test limit is increasing in January 2025, with both of these limits increasing:
If you’re 65 years old with a Full Retirement Age (FRA) of 67, and you’re earning $25,000 per year working part time. In 2024, your income would be $2,680 over the limit, shrinking your benefits by around $112 per month. But in 2025, that same income only surpasses the new limit by $1,600, reducing your checks by only $67 per month.
Gaining a higher maximum benefit, Next year will bring a higher maximum monthly payment, increasing from $4,873 per month to $5,108 per month. To reach this payment, you’ll need to meet a few requirements.
– You will need to work for at least 35 full years, as your benefit is based on an average of your wages throughout the 35 years you earned the most.
– You will also have to consistently reach the maximum taxable earnings limit, This is the highest income subject to Social Security tax. Starting in 2025, that limit will be $176,100 per year
– The final component to earning the max payment is to wait until age 70 to begin claiming benefits. The maximum you can receive at age 62 in 2025 will be $2,831 per month, even if you meet all the other requirements, while the max at 67 is $4,043 per month.
The issue coming up in a few years is funding Social Security into the future. It has been proposed . . . incremental small yearly increases of one tenth of 1% year would solve the issue over a ten year period. No on too date has hopped on to this band wagon or has said we will just cut the benefit. Th latter would noy sit well with recipinents.
Just somw up-to-date information.
The average SS benefit is about $1920. The COLA is 2.5 percent, so the average increase is $480. With the Medicare premium deducted that comes to $470.
For someone with a fixed mortgage the COLA will allow them to buy more.
Renters may get relative relief in 2025 (forecasts are both up and down), but they have certainly been getting by on less in 2023 and 2024.
My annual rent increase alone is always bigger than my Social Security increase, both in absolute dollars and in percentage increase. Whatever measure of inflation they’re using, it doesn’t reflect reality.