With the new year approaching, now is a good time for Social Security recipients to consider the new changes that the Social Security Administration (SSA) is adopting and how they may influence their lives and benefits in the future.
Because benefits are such a significant part of the lives of over 70 million individuals across the country, anticipating how changes would affect them might save a lot of headache in the long run.
Calculate your new Social Security check amount with the new COLA. Every year, all benefits receive a cost-of-living adjustment (COLA). In 2025, this adjustment will be a 2.5% increase in all Social Security benefits, including retirement benefits.
Calculating our new benefit for 2025 using the COLA is simple: take your last payment, apply the 2.5%, and add the result to your benefit. In case you don’t know how to accomplish that, the average retirement pension will increase by $47 per month.
Make sure you are aware of the 2025 benefits calendar
The overall formula for determining when your payment will be delivered does not change from year to year; SSI benefits will continue to be distributed on the first of each month (though the first payment will be distributed on December 31, 2024 due to the weekend and national holiday rule), and the rest of benefits will continue to be distributed in the same staggered manner.
Recipients with birthdays on the 1st-10th of the month will receive their benefits on the second Wednesday of each month; those born on the 11th-20th will receive payouts on the third Wednesday; and those born on the 21st-31st will receive payments on the fourth Wednesday. The National Holiday date change still applies to these benefits.
Double-Check Your Full Retirement Age
If you plan to retire in 2025, be sure you have the correct retirement age, as most people are between the ages of 66 and 67. If you were born before 1959, you are secure; nevertheless, if you were born in that year, remember that your complete retirement age is 66 and 10 months.
If you were born in 1960 or after, your full retirement age is 67, so you still have a year to go before receiving full benefits.
Determine Your Income Tax Obligation
Before the end of 2024, you should evaluate your prospective federal income taxes on Social Security benefits, especially if you have additional income sources. Approximately 40% of Social Security recipients owe federal taxes on their benefits, primarily because of additional “provisional income” from sources such as earnings, interest, investment returns, and dividends.
Social Security taxes are calculated using your provisional income, which is equal to the sum of your adjusted gross income (AGI) plus nontaxable interest and half of your Social Security benefits. The amounts differ between single filers and married people filing jointly:
