2025 is going to bring changes to the Social Security Administration system, and all people who depend on SSA programs (such as retirees and beneficiaries of the Supplemental Security Income program) are going to notice these changes, which will try everything possible to keep the current system adapted and stable, in line with the current economy. Here we are going to tell you everything you need to know so you don’t get left behind and learn about all the changes that are going to be implemented so you can plan well with your payments. Let’s go!
The COLA and its decrease
This year we will see how the COLA decreases to 2.5%, yes, it decreases even if it is an addition to your Social Security payment. And this adjustment (Cost of Living Adjustment) is nothing more than a percentage that the Administration adds so that our pockets do not notice the effects of inflation and we can continue to maintain the same purchasing power despite this. So, as inflation is getting lower and lower (thank God!) this year we will forget about the 3.2% that was added in 2024, and the famous 8.3% that was added in 2023 (when inflation hit us hardest) to settle at 2.5%. And not only that, it is estimated that the situation will regularize in the coming years, this means that in future years the tail may be 2%, 1% or there may not even be one. And no, they are not taking money from you, the situation will simply regularize economically and that “patch” will not be necessary to alleviate the effects of inflation on the economy, you will receive your base payment as always.
Changes in retirement
That’s right, if you were planning to retire at 66… you know that from 2025 the retirement age will be extended to 67, and you can even retire at 70 if you want to increase your retirement earnings by 8% annually. Don’t worry, the early retirement age is still 62 (but you won’t receive 30% of what you’re entitled to… so it’s a decision you’ll have to carefully consider).
Why is the retirement age changing? Because humans live longer, and maintaining a low retirement age would make the pension system unsustainable, which is why the central government has decided to delay the retirement age by almost one more year.
Earn more? You’ll pay more.
That’s right, Social Security income will be subject to taxes. In 2025, this threshold will increase to $176,000, which means that people who earn more will also contribute more to the system. In short, if you earn more, there will also be more taxes for you. Remember that this will not affect all users, but only those who earn above the aforementioned figure.
How do I collect SSA benefits?
It’s not complicated, but you’ll need to meet the requirements for your application to be processed. Below we’ll explain what you need to apply.
- Proof of citizenship: you’ll need to prove that you’re a United States citizen, through your birth certificate or passport.
- Your age through a document that supports your date of birth (it doesn’t matter if it’s a hospital medical record, passport, or religious record).
- A valid, current official ID that contains your full name and date of birth, which can be a driver’s license, tax identification card, or passport.
Once you’ve submitted these documents, you’ll have to wait to find out whether or not you apply for SSA benefits.
As you can see, the changes to Social Security for this coming year may seem a bit chaotic, but they were designed so that the system continues to not work in the coming years. We are aware that these changes will have an impact on millions of people and that is why we advise you to start planning your future to make the most of the benefits that will correspond to you when you decide to stop working.