Change can be a good thing, but it can also be scary, especially when the change might substantially affect your life. If you receive Social Security disability benefits, those benefits are likely an important source of financial security and stability for you and your family when you cannot work and earn an income as you otherwise would. As a result, it’s completely understandable that you may feel some worry about whether or not the Social Security system will make any changes to the way it administers benefits in 2025. There are certain changes planned, and knowing how those changes might affect you is important. Let’s take a closer look together.
Annual Cost-of-Living Adjustment
Each year, to help recipients keep up with the changing cost of living, the Social Security Administration often makes an annual cost-of-living adjustment, known as COLA, for short. Typically, this adjustment is made after considering a wide variety of economic factors. The Social Security Administration has announced that 2025 the cost-of-living adjustment will be 2.5% percent. As a result, millions of Americans will receive an increase in their benefit payment amounts.
If you’re interested in finding your new benefit amount, you can visit the Social Security website at https://www.ssa.gov/myaccount/. Not only is this site helpful for finding out your new benefit amount after the COLA adjustment, but by creating a free account you can also obtain and provide valuable information. You can review your Social Security statement, report any wages, change your address, and manage your benefits. Once you have opened your account, you can also receive messages from the Social Security Administration regarding any important changes to your benefits, and it is a great way to keep up-to-date on important information, and any additional changes that may occur.
Social Security Credits and Wage Cap Increase
Another change coming to Social Security in 2025 is that individuals will have to earn more to qualify for Social Security credits. Additionally, the wage cap for Social Security taxes is expected to increase. Let’s look more closely at what each of these changes means from a practical perspective.
Essentially, in order to be “insured” for the purpose of receiving SSDI benefits, an individual must have worked a job for a sufficient length of time through which he or she regularly paid a portion of their salary into the Social Security system. The number of work credits necessary to earn benefits may change as certain adjustments are made by the Social Security Administration – including an increase to the number of work credits needed, which is expected to happen in 2025.
The SSA uses the number of credits earned not only to determine eligibility for retirement and disability benefits but also to determine eligibility for things like Medicare and survivor’s benefits, among others. In 2025, individuals must have earned 40 credits to become eligible for benefits and are allowed to earn up to four credits per year.
In addition to setting the number of work credits needed, the Social Security Administration also caps the amount of income an individual must pay taxes on and receive credit for when benefits are ultimately calculated. In 2025, this Social Security tax limit is $176,100, which is an increase from the $168,600 wage cap in 2024. Anticipating these changes and knowing that they are planned to occur should help you with anticipating and planning from a financial perspective.
Retirement Age
As a final note, although it does not directly affect disability benefits, Social Security has also increased the full retirement age. For several years, the full retirement age has been increasing gradually for those born between 1955 and 1960 until it reaches 67 years of age. The full retirement age for 2025 will be 66 years and 10 months. Those who receive disability benefits will typically make a transition from disability benefits to retirement benefits when they reach full retirement age. As a result, although this change will not affect the benefit amount itself, it may affect when that particular transition occurs.
SACKETT LAW – HERE FOR YOU
At Sackett Law, we know and understand exactly how important disability benefits can be when you’re struggling with a difficult and disabling condition. We also know that trying to understand all of the complications of the law can seem overwhelming at times. The last thing you need when you’re trying to deal with a disability is also to worry about how you’ll preserve and protect your rights. The good news is, you don’t have to. Instead, you can leave those matters to us, trusting that when you do, we will fight for you every step of the way. The team at Sackett Law will always pursue the best legal strategies on your behalf – and we’re ready to get started today. If you’re ready too, give us a call. We look forward to speaking with you soon.
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