Social Security remains a critical financial resource for millions of retired Americans, with over $1.5 trillion in benefits projected for 2024 alone. However, retirees should be aware of two major changes to Social Security coming in 2025 that could impact their benefits.
GoBankingRates.com recently wrote about the changes which are:
- Smaller COLA Increase: The 2025 Cost of Living Adjustment (COLA) is expected to be only 2.7%, a drop from recent years due to lower inflation. Unfortunately, these adjustments often fall short of actual retiree expenses, further eroding purchasing power.
- Later Full Retirement Age (FRA): For those nearing retirement, the FRA is set to increase. Individuals turning 66 in 2025 will need to wait until 66 and ten months to avoid early filing penalties. This change emphasizes the importance of strategic planning around benefit claims.
To offset these changes, retirees can prepare by building an emergency fund, reducing unnecessary expenses, and even considering a side hustle to boost their financial stability.
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