USA: If you are already dependent upon Social Security benefits, you would have come to understand that such benefits received a cost-of-living adjustment (COLA) of 2.5%, which commenced in January. In general, benefits remain constant during a year, but 2025 is setting up to be quite different as it is being lined up for some important changes, all of which could affect money matters for some people.
Some of these may be pointed towards increasing monthly payments for you, while some may reduce your chances of getting into new problems. Here are things you should know so you can be prepared.
1. Bigger Checks for Millions Thanks to the Social Security Fairness Act
The most important change has resulted from President Biden signing the Social Security Fairness Act into law. Under this act, both of these reductions will get removed, such that retirees receiving pensions from employers who are not covered by Social Security benefits—e.g., firefighters, police officers, and teachers—will not have their payments reduced.
Who Benefits?
- Around 3.2 million retirees and some widow(er)s and spousal beneficiaries.
- The law applies to all benefits paid after December 2023.
- Significantly, many seniors determined to qualify will receive a retroactive payment that covers time back to March 2025.
What to Expect
- MoF from April ’25, most affected retirees would receive a permanent increase in their checks/month:
- Retired workers: Average increase of $360 per month.
- Spousal beneficiaries: Average increase of $700 per month.
- Widows: Average increase of $1,190 per month.
What If Your Payment Doesn’t Change?
Some cases need a manual review by the Social Security Administration (SSA). So, if your April payment matches that of March, contact SSA as it could take as long as a year to resolve the delays.
2. Stricter Identity Verification Rules (Effective April 14, 2025)
To keep fraudulent activities at bay, SSA is tightening its checks for identity. Those who manage their benefits online using my Social Security will not find it markedly different. The new requirement entails an in-person visit for those applying for benefits or making changes through phone calls or mail.
Key Exceptions:
Medicare, disability benefits, or Supplemental Security Income (SSI) applications are capable of doing so through remote measures.
How It Works:
The application may be started by phone, but for final approval, an in-person visit with a valid ID is required.
The SSA office locator tool must be used—some offices have shut down; hence the nearest location may have been changed.
Avoiding Hassle:
Set up my Social Security account, if you haven’t. After approval, you can take care of your benefits completely online.
3. Faster Updates to Direct Deposit (Effective Immediately)
This is good news for your switching banks since now the SSA can make changes to direct deposits in one business day (instead of 30 days) from the announcement.
How to Update the Account:
- Go to your Social Security and log in.
- Up until April 14, 2025, you can also request changes by phone.
4. Return to 100% Overpayment Recovery (Beginning March 27, 2025)
When SSA has made an overpayment in your favor, it can recover the overpayment from future checks. In 2024, the recovery rate for overpayment recovery was 10% of the monthly benefit, or $10, whichever was higher.
What Changes Will Happen?
- The Trump Administration reinstated the 100% recovery rate for new overpayments after March 27, 2025.
- Old overpayments (before that date) will continue to be limited to the 10% cap.
- This, of course, also goes for SSI recipients.
What You Need to Know:
In case of the declaration of overpayment, you stand to lose your entire benefit until the overpayment is cleared.
- You can appeal against it if it is too much to bear, or you could:
- Petition your local SSA office for a lower repayment rate.
- Respond to the appeal SSA may excuse the overpayment.
This $22,924 Social Security Bonus was Once Offered. Did You Miss It?
Little-known methods that can help you maximize your benefits are often overlooked by most retirees. By doing the right things, you can add $22,924 or more to your annual income. Perhaps knowing these secrets of Social Security is the answer to your secure retirement.