Americans will see five changes to Social Security and millions will now score 2.5% payment bump this month ...Middle East

AS the New Year begins, so do changes to Social Security for millions of Americans.

There are five updates to be aware of in 2025, and they could mean more money in your pocket.

The first is the annual cost of living adjustment (COLA), which has now kicked in and sees an increase of 2.5% for beneficiaries.

This means around 72.5 million Americans will receive more money on their social security (SS) checks over the next 12 months.

Those who receive Supplemental Security Income (SSI) will already have received their first payment.

It was due to be paid on January 1, but because of the holidays would have come through a day early on December 31.

The new maximum level of SSI is $967 for 2025, up from $943 last year.

Although COLA has increased, it’s the lowest increase since 2022 – when it was 8.7%.

RETIREMENT AGE CHANGES

For Americans born in 1959 the full retirement age (FRA) is 66 and 10 months this year.

Anyone claiming early could see their payments reduced by up to 30% so it’s best to wait until FRA before claiming if possible.

However, people can claim from the age of 62 if they need to or want, with benefits reduced to 70%.

Waiting until you’re 70 will get you the highest Social Security payment, but waiting any longer than that won’t bring you extra benefits.

From 2026 the FRA rises to 67 years for those born in 1960 and later.

CHANGES TO MAXIMUM EARNINGS

If you work while claiming and you’re under FRA, then you will be slightly better off this year as the earnings limit has gone up.

In 2025, people under full retirement age earning over $23,400, will lose $1 for every $2 earned above the limit – in 2024 the maximum was $22,320.

If your FRA falls in 2025 then you should be able to earn $62,160 before you lose $1 for every $3 over the limit – last year it was $59,520.

2025 Social Security Payment Schedule

Social Security payments are handed out on the second, third, and fourth Wednesday of each month. Benefits will be paid out in 2025 on the following dates:

This only applies to the months before you reach FRA, according to the Social Security Administration.

Once you reach FRA there are no penalties, as no money is withheld.

INCREASE IN LIMIT FOR PAYROLL TAXES

The taxable wage base has been increased so Americans will pay taxes on the first $176,100 of earnings – up from a limit of $168,600 last year.

It’s not likely to affect many people, however, as the majority pay Social Security taxes on all income already.

However, employees in the top earning brackets could see their contributions increase by almost $500 per year.

For self-employed high earners, the figure rises to over $900 per year.

SOCIAL SECURITY CREDITS

Finally, changes to Social Security credits could see workers having to earn more to receive them.

One credit will now “cost” $1,810 of earnings, whereas in 2024 this was $1,730.

At least 40 credits are needed in order to receive retirement benefits and people can earn up to four credits each year only.

Credits are based on total wages and self-employment income for the year, according to the Social Security Administration.

So Americans will need to earn $7,240 to obtain their four credits for 2025.

Meanwhile a former nurse is furious at losing Social Security money she claims she was owed.

And firefighters in Texas explain how legislation changes under the Social Security Fairness Act 2023 will benefit them.

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