The Social Security Administration has announced several changes set to go into effect next year to address inflation and the financial stability for more than 70 million recipients.
The changes are set to affect those who retire, those who receive disability payments and Veterans Affairs benefits, and others who rely on Social Security benefits.
One of the top changes likely to have the most impact is the Cost-of-Living-Adjustment (COLA), which is designed keep Social Security payments increase in line with inflation.
The increase, calculated based on economic data from this year, is set to be about 2.5 percent and is intended to ensure financial stability.
There are a number of important changes set to be enacted in the Social Security system next year.
One of them is the change in the retirement age when Americans are eligible for Social Security benefits. The current range for full retirement is between 66 to 67 years, depending on birth year, though Americans can start collecting reduced benefits at 62.
Full retirement may be advanced sometime in the future to closer to 68 and possibly even higher. The change is intended to modify the system in line with the higher life expectancy of Americans, and to ensure the long-term sustainability of the system.
Social Security Commissioner Martin O’Malley testifies before the Senate Committee on the Budget at the U.S. Capitol earlier this year in September in Washington, DC. A number of vital changes will be made to the system next year (Getty Images)
The cap for taxable earnings will also be increased, from $160,200 this year to $176,100 in 2025. This will expand the range of incomes that are subject to taxes that fund Social Security and increase the amount of money entering the system.
Those who have already retired will see adjustments to their Social Security payments, with the increase in the Cost-of-Living-Adjustment aimed at maintaining their purchasing power amid rising living costs.
People with disabilities, including those who are unable to work and may have limited funds, will see their support rise.
Remaining informed and up-to-date is important to adapt to the changes, with beneficiaries benefitting from planning ahead and evaluating how the updates are likely to change their monthly income and plan accordingly. Beneficiaries may also be helped by exploring options to maximize their benefits by speaking to a financial advisor.
