The Future of Your Social Security: Big Changes Are Coming

Money Explainers

1/7/2025

Your Social Security benefits are changing! Get the essential facts on COLA, eligibility, and what's next for your retirement planning. Don't be caught by surprise!
From rising retirement ages to new electronic payments, understand the most imminent shifts in Social Security that will impact millions. Plan your future wisely!
Major Social Security adjustments are here! Learn about the WEP/GPO elimination, trust fund warnings, and more in this critical update. Your financial future depends on it.
#SocialSecurityUpdate #BenefitChanges #FutureOfRetirement

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00:00Dear Beneficiaries and Retirement Planners, it's crucial to understand the imminent

00:04adjustments to your Social Security payments. Driven by economic, legislative, and demographic

00:11shifts, these changes will significantly impact the financial planning of millions of Americans.

00:18Let's delve into the most relevant developments you need to know now.

00:22Every January, the Social Security Administration applies an annual COLA to help your benefits

00:27keep pace with inflation. This adjustment is based on the Consumer Price Index for Urban Wage

00:33Earners and Clerical Workers, or CPIW. It compares inflation data from the third quarter of the

00:40current year to the same period in the previous year. The CPIW increases, your COLA reflects that

00:47percentage. This landmark law eliminates the Windfall Elimination Provision, or WEP, and the Government

00:54Pension Offset, or GPO. This will increase benefits for nearly 2.8 million Americans who receive pensions

01:02from non-social, security-covered work. Experts warn the trust fund may face insolvency by 2033.

01:11If this happens, it could trigger automatic 21% benefit cuts unless Congress intervenes. For example,

01:18if you were born in 1981 or later, you could face a full retirement age of 70. The maximum earnings

01:25subject to Social Security payroll taxes will rise to $176,100 in 2025, up from $168,600 in 2024,

01:37while early benefits at age 62 will still be available. The reductions for taking them early

01:44will be larger. The Congressional Budget Office estimates depletion by 2034, potentially leading

01:50to a 23% reduction if the OSI and D funds are merged. As baby boomers retire, annual deficits continue

01:58to erode reserves. First up, the Cost of Living Adjustment, or COLA, for SSDI eligibility rules and

02:06processing have undergone significant updates, including increased substantial gainful activity thresholds

02:12and new automated systems using AI to reduce application backlogs. You must now choose between

02:19your own and your spouse's benefits without the option to switch later. Historically, the average

02:26annual COLA has been 3.4%. Staying informed is key to making sound financial decisions for your future.

02:34For 2025, a 2.5% COLA is projected, which means an average $50 monthly increase for retired workers.

02:44The Senior Citizens League forecasts a similar 2.5% for 2026. Starting September 30, all Social Security

02:51payments including retirement, SSI-SSDI provider payments, and tax refunds must be made electronically.

03:00This affects about 500,000 Americans who still receive paper checks. While these adjustments are

03:06vital, it's important to note that many experts argue the CPIW doesn't fully capture retirees' expenses,

03:13especially rising healthcare costs like long-term care and prescription drugs. The purchasing power of

03:19Social Security benefits has declined by 20% since 2010. Next, let's talk about overpayment recovery.

03:28The SSA is recovering overpayments made to beneficiaries. But a revised policy now limits the

03:34withholding of monthly benefits to 50% instead of the original 100%. This began on April 25 for Title II

03:43beneficiaries, which includes retirement, survivor, and disability benefits. In a significant move to

03:50ease financial hardship. The SSA capped recovery at 10% in 2024. A major shift coming this year is

03:58mandatory electronic payments. Now for some good news for many. The Social Security Fairness Act is effective.

04:06January 2025. Many have already received retroactive payments dating back to January 2024.

04:17With average one-time payments of over $6,700. However, a pressing concern looms. The Social Security

04:25Trust Fund Depletion Warning. The full retirement age is also on the rise. It's expected to gradually

04:31increase from 67 to 68. Or even higher for workers born after 1960. You'll also see an increase in the

04:39taxable earnings cap. There's increasing legislative support for eliminating taxes on Social Security benefits.

04:46In 2025, if you're below full retirement age, you can earn up to $23,400 before $1 is withheld for

04:56every $2 above the limit. If you reach full retirement age in 2025, you can earn up to $62,160

05:05before your birthday without reductions. However, this would reduce federal revenue by $1.45 trillion

05:12between 2025 and 2034, and could accelerate the Trust Fund as depletion. The SSA is undergoing a

05:20significant technological modernization. They're overhauling their systems, including a new AI-driven

05:28telecommunications system set for full deployment by summer 2025. This could improve responsiveness,

05:35but also poses a challenge for older adults without internet access.

05:39• Enhanced online services and digital ID requirements will become mandatory for many

05:45processes. Discussions are growing around the taxation of benefits. For those still working while

05:52receiving benefits, the earnings limits for working beneficiaries are also changing. Important changes

05:58are also coming to SSI and SSDI. Effective September 30, 2024.

06:05Food assistance will no longer be counted in in-kind support calculations for SSI eligibility.

06:12The maximum monthly SSI payments in 2025 will be $943 for individuals and $1,415 for couples.

06:22Finally, spousal benefit restructuring is now in effect for most future retirees born after January 2, 1954.

06:29And looking ahead, proposals for means-testing benefits for wealthier recipients are gaining traction.

06:36With suggested income thresholds of $55,000 for individuals and $110,000 for couples, excluding Social

06:44Security income. These are the most critical changes impacting your Social Security benefits in the

06:50coming years. Money Explainers

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