Social Security announces 2 more changes after COLA

This week marks a significant moment for retirees, as the Social Security Administration (SSA) prepares to reveal the cost of living adjustment (COLA) to 2025. After much expectation, the ASS is ready to make the announcement, but the delay has a clear reason: the government needs the final inflation data for September to calculate the adjustment. As this data will only be available on October 10th, retirees will have to wait a little longer to find out what their increase will be next year.

October 10th is not just about the PASTE, however. THE ASS will also release other important updates for 2025, including changes that affect working retirees and paying workers Social Security. Two specific areas are particularly important for retirees and those approaching retirement: earnings test limits and the salary cap for Social Security taxes.

One of the beneficial aspects Social Security is that it allows beneficiaries to work and earn income while receiving benefits. However, before you reach full retirement age, there are limits to how much you can earn before it starts to affect your life. Social Security Payments. If you have not yet reached full retirement age but are still receiving benefits, some of your benefits may be withheld if your earnings exceed a certain threshold.

For 2024, this earnings test limit is set at $22,320. This means that if you earn above this amount before reaching full retirement ageSome of your benefits may be withheld. For individuals who will achieve full retirement age during 2024, the earnings test limit is higher, at $59,520. The expectation is that in 2025 these limits will increase, allowing retirees to earn a little more without facing a reduction in benefits.

It is important to note, however, that any benefits withheld from exceeding the earnings limit are not lost permanently. THE ASS returns these amounts when you reach full retirement age. But while this may be good news for your long-term financial prospects, it may not help if you count on these benefits in the short term.

THE salary cap is another key factor that will be updated in 2025 and has an impact on both workers and the world at large. Social Security System. Social Security Taxes do not apply to all of a worker’s income. Instead, there is a salary cap that limits how much of a person’s earnings are subject to Social Security Taxes. For 2024, the salary cap is set at $168,600, meaning any earnings above that threshold are not taxed for SSocial Security purposes.

This salary cap is likely to increase in 2025, reflecting inflation and salary growth trends. While this may seem like a detail that only matters to workers and not retirees, it actually plays a critical role in the long-term stability of the Social Security System. The program faces a potential revenue shortfall over the next decade, which could lead to benefit cuts if additional revenue sources are not secured. Raising the salary threshold means more income is taxed, which helps funnel more money into the system. This is a piece of the puzzle to ensure the future sustainability of Social Security and potentially avoiding benefit cuts in the future.

While the spotlight is on COLA Ad, It’s worth keeping an eye on these other updates SSA. THE earnings test limits and salary cap are significant factors that can influence how much retirees can earn without penalty and how much money flows into the Social Security System general.

Given the importance of these updates, it is a good idea to check the SSA website on October 10 to see how these changes will affect you. Whether you are a retiree or someone still in the workforce, stay informed about Changes to Social Security It’s crucial to ensuring your financial well-being for years to come.