Social Security Announces 2 More New Changes After The COLA

As the SSA gets prepared to release the 2025 COLA, this week is a significant time for retirees. Even though there is a slight delay, the SSA is finally scheduled to make its announcement after a period of waiting. The reason for this delay is that the SSA requires the final inflation data from September, which will be available on October 10.

There will be other important updates, but retirees will have to wait a little longer for the official announcement regarding the increase. These include adjustments that impact both active retirees and those who continue to make Social Security contributions.

Social Security Changes

Retirees eagerly await the upcoming COLA announcement because it will determine how their benefits will change over the next year. However, the announcement on October 10 goes beyond just the COLA.

Other significant updates that may impact a large number of individuals, especially those who are still employed or who are earning Social Security, will also be released by the SSA.

Updates to the earnings-test limits and the wage cap for Social Security taxes are two significant changes to keep an eye on. The financial situation of both current and expected retirees will be impacted by these updates.

Social Security Announces 2 More New Changes After The COLA

Beneficiaries must be aware of the upcoming changes to Social Security in order to plan how their income and benefits will be managed. Retirees who are still working and earning income will want to pay close attention to the updates on earnings limits, which may affect how much they can earn without a reduction in benefits.

Employees who pay into Social Security must monitor the wage cap because it determines the percentage of their income that is accountable to Social Security taxes.

Earnings-Test Limits for 2025

• Beneficiaries of Social Security have the option to keep working while receiving benefits, but their earning potential is limited before they reach full retirement age.
• A certain amount of a retiree’s benefits may be deducted if their earnings exceed the earnings-test limit, which is set at $22,320 in 2024.
• The cap is higher, at $59,520, for those who will be of full retirement age in 2024.
• These caps are expected to increase in 2025, allowing retirees to increase their income while maintaining their benefits.
• It is important to note that any benefits deducted are returned once the individual reaches full retirement age.

The 2025 Social Security Wage Cap

• The Social Security wage limit is another important update for 2025. The amount of income that is accountable to Social Security taxes is limited at this level.
• The wage limit for 2024 is $168,600, which means that any income over this limit is free from Social Security taxes.
• It is expected that this limit will be increased in 2025 to account for inflation and wage growth.
• Higher taxable earnings help fund the program and could even stop future benefit cuts.

The Importance of Monitoring Social Security Updates for Financial Planning

• While the COLA announcement is the primary objective, it’s also critical to keep up with other SSA updates, including adjustments to the wage limit and earnings-test limits.
• These updates impact how much retirees can earn without facing a reduction in benefits, and they also affect the amount of revenue that flows into the Social Security system.
• For both current retirees and employees preparing for retirement, it is essential that they review these updates on October 10.
• Better financial planning and future security can be achieved by staying updated on Social Security changes.

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