Social Security is a vital source of income for many Americans. Changes to the program in 2025 could impact both the payments beneficiaries receive and the qualifications they need to access those benefits. One of the biggest changes is an adjustment to the earnings threshold required to earn work credits.
In 2025, workers will need to earn $1,810 for each credit, up from $1,730. Workers can earn up to four credits per year. Full-time workers likely don’t need to worry about these changes.
Working 40 hours per week at minimum wage over a standard 50-week year ensures earning the maximum credits. However, part-time workers might struggle to accumulate enough credits. They should carefully review the changes and plan their earnings accordingly.
It’s important to note that work credits determine eligibility for benefits but don’t affect the payment amount. Credits establish eligibility for retirement, disability, survivors’ benefits, and Medicare qualification. They don’t influence the actual payment amounts.
The Social Security cost-of-living adjustment (COLA) will also be slightly different in 2025.
Changes to Social Security requirements
Beneficiaries will see a smaller increase compared to previous years.
The COLA increase was 8.7% in 2023 due to high inflation and 3.2% in 2024. It’s projected to be 2.5% in 2025, reflecting stabilizing inflation rates. If you’re nearing retirement age, understanding Social Security is critical.
Make sure your earnings secure at least four credits each year for the 10 years before your planned retirement date. This is especially important for those with varying or part-time income. Failing to earn the minimum credits may impact your eligibility for future benefits.
Carefully consider the timing of claiming your Social Security benefits. You can access benefits as early as age 62, but waiting until full retirement age or longer can result in higher monthly payments. Planning for post-retirement income is also crucial.
Relying solely on Social Security might not be feasible, so having additional savings, investments, and reliable revenue streams can provide a greater financial safety net. For the latest updates about Social Security and financial planning, stay tuned to reliable financial news sources. By staying informed and proactive, you can better prepare for a stable financial future.
