Social Security update: Four projected changes to Social Security before 2025
There are multiple changes to Social Security that retirees can expect over the next two years, and they include higher benefits and better customer service.
The Social Security Administration released its "Vision 2025" plan this year, highlighting its 80 years of history and laying out its projects for the next two years.
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Here are four Social Security changes that retirees can expect:
1. Higher Maximum benefits:
The maximum benefits that retirees can receive at full retirement age change with inflation. The most recent increase occurred for 2023 when it rose from $3,345 in 2022 to $3,627 in 2023. Based on current inflation, another increase is expected before 2025,
The maximum amount of money each beneficiary can receive differs depending on their age at retirement. Recipients who retire at 62 get monthly installments of up to $2,572. Those who retire at 67 receive a maximum benefit of $3,627, and people who delay retirement until 70 get the highest maximum payment of up to $4,555 per month, according to the SSA.
Not every beneficiary receives the maximum payment, which also depends on the length of time they pay into Social Security and the amount of money that is paid into the program during those years.
2. Change in monthly income due to Cost of Living increase
A cost-of-living adjustment increases the monthly benefits that retirees receive each year based on the consumer price index for urban wage earners and clerical workers. In 2024, the increase is only expected to be 2.7%, according to May's 2023 consumer price index report, which was released last month. In comparison, the COLA last year was an 8.7% increase.
There will be two adjustments that come before the 2025 payments, making it difficult to tell just how much of an increase beneficiaries can expect to see. The first increase will be released in October, and the second one will come a year later. The final determination is based on the average inflation rate and CPI-W of the months in the year's third quarter: July, August, and September.
3. Better customer service
The SSA said it plans to improve its customer service experience by employing "exceptional" workers and by accommodating its recipients through whatever means of communication necessary. For example, customers can choose when, where, and how they receive services.
“In 2025, we are focused on understanding the customer’s experience over their lifetime,” the SSA said on its website. “Through this understanding, we respond to and anticipate our customers's needs, and thoughtfully craft appropriate service options.”
The SSA said it also plans to make a beneficiary's interaction with the agency more "personal" based on the individual's "needs, preferences, and relationship" with Social Security.
4. A change for women who receive benefits
Because of a growing female workforce, more women are expected to receive their own retirement payments by 2025 rather than simply receiving payments from their spouse's benefits.
The SSA projects that more than half of women over the age of 60 will receive benefits based solely on their own work in 2025. This number is expected to increase further to 70% by 2095, the administration said. It also predicts that more than one-third of women will be dually entitled to benefits based on their own work and their spouse's in 2025. The number is expected to shrink to one quarter by 2095.
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Although these changes are expected to occur by 2025, there is still a lot that's up in the air when it comes to the future of Social Security. Discussions on the program's future have been going on in Congress for years, and experts have warned that the program could be insolvent in 10 years if nothing is done.
If no funding for the program is settled by 2033, money in the program's trust is expected to run out. This means that recipients could see a decrease in their payments.
Source: Washington Examiner
