Are you affected? Social Security major update could impact these 3 groups
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The Social Security Administration (SSA) is making big changes that could impact millions. Are you one of the groups who will be affected?
Stay informed with The GrayVine as we break down what’s coming and how it could affect your finances.
For the upcoming year, the COLA is projected to be around 2.5 percent.
This increase is calculated based on economic data from the current year and is designed to help maintain your financial stability in the face of rising living costs.
1. Retirees
If you've already bid farewell to the workforce, you'll see an adjustment in your Social Security payments due to the COLA.
This is intended to help you maintain your purchasing power as the cost of living rises.
2. Disability and Veterans Affairs Beneficiaries
Those who receive disability payments, including Veterans Affairs benefits, will also see an increase in their support.
This is particularly crucial for individuals who are unable to work and may have limited financial resources.
3. Future Retirees
The age at which Americans are eligible for full Social Security benefits is also set to change.
Currently, the full retirement age ranges from 66 to 67, depending on your birth year, with the option to start collecting reduced benefits at 62.
However, there's a possibility that the full retirement age could be advanced to 68 or even higher in the future.
This change is being considered to align the system with the increasing life expectancy of Americans and to ensure the system's long-term sustainability.
This cap is the maximum amount of income subject to the taxes that fund Social Security.
Currently, the cap is set at $160,200, but it's slated to rise to $176,100 by 2025.
This adjustment will broaden the range of incomes taxed and is expected to bring more money into the Social Security system.
With these changes on the horizon, it's more important than ever to stay informed and consider how they might affect your monthly income.
Planning ahead can help you adapt smoothly to these updates.
Beneficiaries may find it beneficial to speak with a financial advisor to explore options for maximizing their benefits.
In a related story, Social Security may shift benefits away from some retirees. Read more about this story here.
Have you started planning for these updates? Share your insights in the comments below.
Stay informed with The GrayVine as we break down what’s coming and how it could affect your finances.
Understanding the Cost-of-Living Adjustment (COLA)
The SSA has a mechanism in place to ensure that Social Security payments keep pace with inflation. This mechanism is known as the Cost-of-Living Adjustment, or COLA.For the upcoming year, the COLA is projected to be around 2.5 percent.
This increase is calculated based on economic data from the current year and is designed to help maintain your financial stability in the face of rising living costs.
The Social Security Administration has announced changes affecting retirees, disability payment, and Veterans Affairs benefit recipients. Image source: olia danilevich/Pexels.
Who will be impacted?
The changes announced by the SSA will predominantly affect three groups:1. Retirees
If you've already bid farewell to the workforce, you'll see an adjustment in your Social Security payments due to the COLA.
This is intended to help you maintain your purchasing power as the cost of living rises.
2. Disability and Veterans Affairs Beneficiaries
Those who receive disability payments, including Veterans Affairs benefits, will also see an increase in their support.
This is particularly crucial for individuals who are unable to work and may have limited financial resources.
3. Future Retirees
The age at which Americans are eligible for full Social Security benefits is also set to change.
Currently, the full retirement age ranges from 66 to 67, depending on your birth year, with the option to start collecting reduced benefits at 62.
However, there's a possibility that the full retirement age could be advanced to 68 or even higher in the future.
This change is being considered to align the system with the increasing life expectancy of Americans and to ensure the system's long-term sustainability.
The Taxable Earnings Cap Increase
Another notable change is the increase in the cap for taxable earnings.This cap is the maximum amount of income subject to the taxes that fund Social Security.
Currently, the cap is set at $160,200, but it's slated to rise to $176,100 by 2025.
This adjustment will broaden the range of incomes taxed and is expected to bring more money into the Social Security system.
With these changes on the horizon, it's more important than ever to stay informed and consider how they might affect your monthly income.
Planning ahead can help you adapt smoothly to these updates.
Beneficiaries may find it beneficial to speak with a financial advisor to explore options for maximizing their benefits.
In a related story, Social Security may shift benefits away from some retirees. Read more about this story here.
