The Social Security Administration (SSA) has made some changes to its work rules for 2025. These updates affect many Americans, such as retirees, disabled workers, and everyone still paying into the system. Here is a simple overview of the new Social Security work rules for 2025, divided into main parts.
Cost-of-Living Adjustment (COLA) and Its Impact on Workers
Every year, people look forward to the Cost-of-Living Adjustment (COLA) in Social Security. In 2025, those who receive benefits will get a 2.5% increase in their monthly payments. This increase helps them deal with higher prices. It applies to all Social Security payments, such as retirement benefits, disability benefits, survivor benefits, and Supplemental Security Income (SSI).
For those close to retiring or who are already retired, this COLA helps keep their buying power steady even though prices for goods and services go up. For example, the average monthly benefit for retired workers will go up from $1,927 in 2024 to $1,976 in 2025 because of this adjustment.
Earnings Limits for Working Beneficiaries
Social Security has rules about how much money people can make if they get benefits before they reach full retirement age (FRA) and still work. These limits will increase in 2025:
- Annual Earnings Limit Before FRA: In 2025, if someone is under full retirement age, they can earn up to $23,400 a year, which is more than the $22,320 allowed in 2024. If they earn more than this limit, for every $2 they make over, $1 will be taken from their Social Security payments.
- Earnings Limit During FRA Year: For those who will reach full retirement age in 2025, the earnings limit will go up to $62,160, which is higher than the $59,250 in 2024. In this case, for every $3 they earn over this amount during the months leading up to their FRA, $1 will be deducted from their benefits.
After a person reaches full retirement age, they can earn as much money as they want without losing any Social Security benefits.
Full Retirement Age and Delayed Retirement Credits
The full retirement age is 67 for anyone born in 1960 or later. If workers wait to claim their Social Security benefits past this age, they can earn delayed retirement credits. These credits raise the monthly benefit by about 8% each year until they turn 70.
For example:
A worker who retires at the full retirement age in 2025 could get a maximum monthly payment of $4,018. However, if they wait until they are 70 to claim their benefits, the amount could go up a lot because of these credits.
Increase in Taxable Earnings Cap
Workers pay into Social Security with taxes taken from their paychecks based on how much they earn, but only up to a certain limit. For 2025:
- The highest amount of earnings that can be taxed for Social Security will go up from $168,600 in 2024 to $176,100.
- Employees will keep paying a tax rate of 6.2%, but those who are self-employed will pay 12.4% because they have to cover both parts of the tax.
This change means that people who earn more will help pay more for the program.
New Credit Earning Requirement
To get Social Security benefits like retirement or disability payments, workers need to earn enough “credits” during their careers. Starting in 2025:
- You will need to make at least $1,810 to earn one credit, compared to $1,640 for one credit in 2024.
- Workers can earn up to four credits each year by reaching this amount.
This change shows how wages have grown and makes sure contributions match the present economic situation.
Changes to Disability Benefits
Social Security Disability Insurance (SSDI) helps people who can’t work because of disabilities. Here are some important updates:
- Starting in 2025, the average monthly SSDI payment for disabled workers will go up from $1,542 to about $1,580.
- Disabled workers with family members, like a spouse and kids, can expect to receive around $2,826 each month.
- For workers who are blind, they can earn up to $2,700 a month and still keep their SSDI benefits.
These updates aim to help those with disabilities stay financially secure, especially with rising costs.
Medicare Part B Premiums Affecting Net Benefits
Medicare Part B premiums are increasing from $174.70 a month in 2024 to about $185 a month starting in January 2025. This change is not directly linked to Social Security’s work rules, but it affects deductions from benefits.
For many people who have their Medicare payments taken out of their Social Security checks, this increase will reduce the benefits from the cost-of-living adjustment (COLA).
Frequently Asked Questions
Can I work full-time and still get SSDI benefits?
Yes, you can work full-time, but if you earn more than a certain amount, your SSDI benefits might be reduced or stopped. If you are in a Trial Work Period, you can earn any amount without losing your benefits.
How do I qualify for the Trial Work Period?
You qualify for the Trial Work Period as soon as you start getting SSDI benefits. This period lets you try working for up to nine months while still receiving full SSDI benefits.
What is the Ticket to Work Program?
The Ticket to Work Program is a free service for people who receive SSDI or SSI benefits. It offers job training, help with finding jobs, and other support to assist you in going back to work and keeping your benefits.
Can I still get SSI if I earn more than the income limit?
It depends on how much you earn. If you make over the limit, your SSI benefits might be lowered or cut off completely. However, some work benefits, like Impairment-Related Work Expenses, can help you keep some of your benefits.