Social Security has once more revealed a significant new update for 2025 – Here’s the modification that will impact retirees

Social Security announces major update for 2025

According to the most recent updates, the Social Security Administration has reiterated significant modifications for the year 2025. The federal agency stated that they will implement major reforms at the start of 2025 to assist their beneficiaries in dealing with rising inflation and to offer competitive wages. One of the most notable changes that will take place as soon as 2025 begins is the rise in the taxable maximum, which is presently $168,600 each year but will be raised to aid taxpayers. The taxable maximum refers to the monthly earnings that an employee receives, and any income that falls under this limit will not be taxed in 2025. This is the yearly income threshold that payroll taxes are applicable to.

A new change in Social Security will impact retirees starting in 2025

According to Social Security, the yearly taxable limit will be $176,100 effective January 1, 2025. Any amount received over this threshold must be documented, and only earnings up to this limit will be disbursed. The SSA also emphasized that they raise this amount annually to match the growth in average salaries. The Medicare tax does not have an income cap, meaning you must pay Medicare taxes on your entire income.

Additionally, Social Security will implement substantial changes next year, featuring a rise in the Cost of Living Adjustment (COLA) to 2.5% for all beneficiaries under the Administration. Taking into account this yearly rise, listed below are the updated payment amounts for retirees, survivors, individuals with disabilities, and those receiving the Supplemental Security Income (SSI) program.

It is essential to highlight that these new payment figures will take effect starting January 2025. This indicates that recipients of the retirement, survivor, and disability insurance (RSDI) program will get their augmented Social Security payment until January 3rd if they submitted their applications prior to May 1997, and on January 8 if they applied thereafter and were born between the 1st and the 10th of any month. For an overview of the payment amounts expected in January, kindly consult the information below:

RSDI recipients	January 3rd	Only if they claimed the first benefit before May 1997
RSDI recipients (claimed after 1997)	January 8th  January 15th  January 22th	Day of birth: 1st–10th. Day of birth: 11th–20th. Day of birth: 21st-31st.
Extra SSI payment	January 31st (Wednesday)	Extra SSI payment as February 1st falls on a weekend

As you can observe, January will provide four disbursements for RSDI recipients and an additional payment for SSI beneficiaries. Nevertheless, SSI beneficiaries will not obtain their standard payment on January 1 as it coincides with a holiday. Consequently, only recipients of the Supplemental Security Income (SSI) program will get their increased payments this year, on December 31st. As the payment schedule may be hard to comprehend, keep in mind that you can always log into your My Social Security Account to download financial statements and request further information about Social Security.

Additional Social Security modifications that recipients need to be informed about

1. A new regulation broadens the definition of a public assistance household to encompass SNAP benefits, affecting the aid for SSI applicants residing in these households since support from other household members may be considered as income.
2. Food donations will now be regarded as earned income. Starting in September, food gifts will be excluded from the assessment of the in-kind support and maintenance (ISM) category for SSI beneficiaries. Only housing that is affordable or free will be permitted. This change will assist the 9% of SSI recipients whose payments have been lowered because of food gifts by making certain that their payments remain stable regardless of food contributions.

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