Social Security is again announcing a major change for 2025

Based on the latest news, the Social Security Administration has again announced big changes for 2025. According to the federal agency, they will implement significant reforms at the beginning of 2025 to help their beneficiaries cope with rising inflation and offer competitive salaries. One of the most significant changes that will occur from the beginning of 2025 is the increase in the maximum taxable amount, which is currently $168,600 per year but will be increased to help taxpayers. The monthly income that an employee earns is called the maximum taxable amount, and any income below this limit will not be taxed in 2025. This is the annual income limit to which the income tax applies.

The new Social Security change will impact retirees in 2025

Social Security said the maximum annual taxable amount will be $176,100 starting January 1, 2025. Any income above this threshold must be recorded and only income up to this amount will be paid out. The SSA also emphasized that it increases this amount each year to keep pace with rising average wages. There is no income cap on the Medicare tax, so you must pay Medicare taxes on all of your income. In addition, Social Security will make significant adjustments in the coming year, including an increase in Cost of Living Adjustment (COLA) to 2.5% for all recipients under the administration. With this annual increase in mind, here are all of the new payment amounts available to retirees, survivors, disabled and Supplemental Security Income (SSI) program recipients.

It should be noted that these new payout amounts will only come into effect from January 2025. This means that beneficiaries from the Old Age, Survivors and Disability Insurance (RSDI) program will receive their enhanced Social Security check by January 3 if they applied for benefits before May 1997, and on January 8 if they applied for benefits after that date and were born between the 1st and 10th of a given month. To get a general overview of the upcoming payment amounts in January, please note the following information:

As you can see, there will be four payments for RSDI beneficiaries and one additional payment for SSI recipients in January. However, SSI recipients will not receive their regular payment on January 1st because it falls on a holiday. Because of this, recipients of the Supplemental Security Income (SSI) program will be the only recipients to receive their increase payments on December 31 this year. Because the payment schedule can be difficult to understand, remember that you can always access your My Social Security account, where you can download financial reports and even request additional Social Security information.

Other Social Security Changes Beneficiaries Should Be Aware of

1. A new regulation expands the definition of a social welfare budget to include SNAP benefits, which impacts benefits for SSI applicants living in these households because assistance from other household members may be counted as income.
2. Food donations are no longer considered unearned income. Starting in September, food donations will no longer be considered when analyzing the In-Kind Support and Maintenance (ISM) category for SSI recipients. Instead, only affordable or free housing will be permitted. This change benefits the 9% of SSI beneficiaries whose payments were reduced due to food gifts by ensuring that their payments do not fluctuate due to food gifts.