Important Social Security Announcements Coming Soon: 3 Things to Know Now

Nearly 68 million Americans will receive a Social Security check in 2024, and for many people, those checks will make or break their finances.

So it's a good idea to make sure you stay up to date with the latest changes to the program. While Social Security may not change significantly from year to year, there are some adjustments that affect your monthly payment.

On October 10, the Social Security Administration (SSA) plans to make some important announcements for 2025. Here's what you can expect.

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1. The 2025 COLA will be announced

The cost of living adjustment (COLA) is one way to help benefits maintain their purchasing power over time. Beneficiaries will receive monthly checks for the rest of their lives, and COLA wants to ensure those payments can keep up with rising costs.

In 2024, the COLA was 3.2%, meaning beneficiaries received an additional 3.2% of their benefit amount starting in January of this year. On October 10, the SSA will announce next year's adjustment, which will take effect in January 2025.

It is likely that the 2025 COLA will be smaller than this year's adjustment because inflation cooled slightly last year. Nonprofit group The Senior Citizens League has forecast it will end up at 2.5% based on this year's inflation data from the Bureau of Labor Statistics, but we won't know the exact number until the SSA makes the official announcement.

2. Medicare premiums affect the amount of your benefits

Before you get too excited about next year's COLA, keep in mind that Medicare costs will also change. Because Medicare Part B premiums are generally deducted from Social Security payments, higher premiums could erode your benefits even if we receive a higher COLA than expected.

In 2024, the standard premium for Medicare Part B is $174.70 per month for people making $103,000 per year or less (or $206,000 per year or less for married couples filing jointly ). In 2023, the standard Part B premium was $164.90 per month, a difference of $9.80 per month.

For some people, even slightly higher premiums can have a significant impact on their benefits. For example, if you receive $2,000 per month from Social Security, a 2.5% COLA would give you an additional $50 per month. Even if Medicare premiums only go up by about $10 per month, that's still a hefty portion of your COLA increase.

3. The earning limit is likely to be increased

If you work while receiving Social Security, you may be subject to the retirement income test – an income limit that determines whether your benefits will be withheld based on your wages.

There are two limits depending on whether or not you reach your full retirement age this year. If you are under full retirement age, your benefits will be reduced by $1 for every $2 you earn above $22,320 per year. If you reach full retirement age this year, your reduction will be $1 for every $3 over the limit of $59,520 per year.

Data source: Social Security Administration. Table by author.

These caps typically increase each year to reflect changes in inflation, so you can probably expect higher caps in 2025. This can be a good thing for those who are still working, as it allows you to earn more before you face benefit cuts.

This month is a big one for Social Security, and you can expect some big changes in 2025. By staying up to date on upcoming announcements, you can start the next year best prepared.