The Social Security Administration has announced several changes that will take effect next year to address inflation and financial stability for more than 70 million recipients.
These changes are designed to affect retirees, those who receive disability 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 to keep Social Security payments in line with inflation.
The increase, calculated based on economic data from this year, should be about 2.5 percent and is intended to ensure financial stability.
There are several important changes set to be implemented in the Social Security system next year.
The other is a change in the retirement age at which Americans are eligible to receive Social Security benefits. The current full retirement age is between ages 66 and 66, depending on the year of birth, although Americans can begin collecting reduced benefits at 62.
Full retirement age may be raised at some point in the future to near 68 and possibly even higher. This change is intended to adjust the system in line with the longevity of Americans, and to ensure the long-term sustainability of the system.
Social Security Administration Director Martin O’Malley testifies before the Senate Budget Committee at the US Capitol earlier this year in September in Washington, DC. A number of important changes will be made to the system next year (Getty Images)
The tax cap will also be increased, from $ 160,200 this year to $ 176,100 in 2025. This will increase the amount of income received under taxes that pay Social Security and increase the amount that goes into the system.
Those who have already retired will see an adjustment to their Social Security payments, with the addition of a Cost-of-Living-Adjustment expected to maintain their purchasing power amid rising living costs.
People with disabilities, including those who cannot work and may have low incomes, will see their support increase.
Staying informed and up-to-date is essential to keep up with the changes, with beneficiaries benefiting from planning ahead and assessing how changes are likely to change their monthly income and planning accordingly. Beneficiaries can also be helped by exploring options for increasing their benefits by speaking to a financial advisor.