In 2025, retirees are in for some major changes to their Social Security and Medicare benefits. President Joe Biden is set to sign a bill that will increase Social Security benefits for certain pensioners, along with the annual cost-of-living adjustment. Additionally, Medicare enrollees will benefit from a $2,000 annual out-of-pocket Part D prescription drug cap to help ease financial burdens. Here’s what you need to know for the upcoming year:
### Some pensioners could get benefit increase
The Senate passed a bill to boost Social Security payments for millions of people who work in government or public service jobs like teachers, firefighters, and police officers. This bill eliminates provisions like the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), potentially resulting in higher benefit payments for about 2.5 million beneficiaries.
### All Social Security beneficiaries to get 2.5% COLA
All beneficiaries will see a 2.5% increase in their Social Security checks in 2025. This adjustment reflects a decrease in the pace of inflation compared to previous years, with the average worker retirement benefit amounting to $1,976 per month.
### Monthly Medicare Part B premiums go up
Monthly Medicare Part B premiums will increase to $185 per month in 2025, along with rising deductibles. Beneficiaries with higher incomes may face income-related adjustments affecting their premium payments.
### Medicare $2,000 prescription drug cap goes into effect
The Inflation Reduction Act will now cap annual out-of-pocket Medicare Part D drug costs at $2,000. Beneficiaries can choose to pay out-of-pocket costs monthly or all at once, with additional caps on insulin costs.
### Social Security trust fund depletion dates get closer
The Social Security trust fund may be depleted by 2033, leading to reduced benefit payments unless Congress acts sooner. Changes from the Social Security Fairness Act may affect the depletion date, requiring comprehensive bipartisan changes to the program.
### Other important changes to note
– Maximum taxable earnings will rise to $176,100 in 2025.
– Retirement earnings test thresholds have been adjusted for those under full retirement age.
– The Social Security Administration now requires appointments for in-person services at local offices, encouraging the use of online and automated services for efficiency.
For more information and updates on your benefits, stay informed and plan accordingly for the changes ahead.