WPBN: The Social Security system is going to undergo a number of reforms as the new year begins. A cost-of-living adjustment, also known as a COLA, is announced by the Social Security Administration on an annual basis.
This adjustment is applied to the payments that recipients receive beginning with the disbursement that corresponds to the month of January.
This year’s rise was 2.5%, which will also result in an increase in the minimum wage that contributors must make in order to receive each Social Security credit, which is often referred to as a “quarter of coverage.”
Additionally, the wage cap for Social Security taxes will be raised. In addition, as a result of this change, beneficiaries will have to wait a little bit longer to achieve the full retirement age.
What is the new age at which one can retire beginning on January 1, 2025?
Once you reach the age of 62, the Social Security Administration (SSA) will begin allowing you to begin receiving retirement payments; however, this will result in a thirty percent reduction in the amount of benefits you receive overall.
The year 2024 marked the achievement of full retirement age for those individuals in the United States who had attained the age of 66 and eighteen months. At that point, members of the Social Security system are eligible to receive their full Old-Age benefits.
These individuals were born in the year 1958. individuals who were born a year later, on the other hand, will have to wait until they are 66 and ten months old.
#DYK you can work and receive your full retirement benefits? If you are full retirement age, you can earn as much as you like without having your benefit amount reduced. Stay informed by checking your full retirement age today, https://t.co/PYjyAKXR4X. pic.twitter.com/j8E88HiizH
— Social Security (@SocialSecurity) December 4, 2024
This means that only individuals who were born in the first two months of 1959 will be able to claim full benefits in 2025 without being penalized, in addition to those who were born in earlier years.
Those individuals who were born in 1960 or later will not be eligible for full retirement benefits until they reach the age of 67. The Social Security Administration advises that individuals who were born on January 1 of any year should refer to the year before to that.
The Social Security Administration (SSA) permits citizens of the United States to submit an application for benefits up to four months before they anticipate receiving them. Therefore, if you are considering filing for retirement benefits in the near future, even if you are not yet prepared to do so, it is strongly suggested that you go to the Social Security Administration website that is dedicated to retirement benefits.
In what manner should the penalty for Social Security early retirement be computed?
According to the Social Security Administration, there is a computation that determines how much of your monthly Social Security payments will be permanently lowered from the primary insurance amount that you have acquired over the years that you have contributed. This reduction is determined by the year in which you retire.
For every month that a beneficiary enrolls in Social Security prior to reaching full retirement age, the primary insurance amount will be lowered by 5/9 of 1 percent, which is approximately 0.55 percent, throughout the first 36 months of the beneficiary’s eligibility for Social Security benefits.
There is a reduction of 5/12 of one percent, which is little less than 0.42 percent, for each extra month that brings the total number of months beyond 36 months.
A person who was born in 1960 or later and who retires at the age of 62 in the first month that they are eligible to begin receiving Social Security payments will be sixty months short of reaching full retirement age.
In order to compensate for the increased number of months that it is anticipated that they will be receiving monthly payments, this amounts to a permanent reduction of thirty percent.
