Lately, there’s been a lot of noise in the news about budget fights in Washington, DC, and some scary headlines about possible cuts to programs like Medicare, Medicaid, and Social Security. If you count on these programs, it’s understandable to feel concerned. But when it comes to Social Security, things might not be as bad as they sound. In fact, there’s some good news to share, including a cost-of-living increase and a new law that could mean bigger Social Security checks for some people.
In fact, this year the annual cost-of-living adjustment (COLA) triggered a 2.5% increases for most Social Security recipients. COLA is based on Consumer Price Index (CPI) and is meant to assist those who rely on Social Security as part of their monthly income. Most beneficiaries saw this increase take effect in January.
Another change coming this year affects those still in the workforce who pay into the Social Security system. These folks will see the maximum amount of earnings subject to Social Security tax increase to $176,100.
Lastly, in 2024, Congress passed a new law called the Social Security Fairness Act that may bring good news for many retirees. This law gets rid of two old rules — the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) — that had reduced Social Security benefits for some people who worked in jobs that didn’t pay into Social Security, like certain teachers, police officers, and government workers, but who also qualified for Social Security benefits from other work or through a spouse. By eliminating WEP and GPO, the new law could mean higher monthly Social Security checks for those affected. In some cases, people may even receive back pay for the money they should have received in the past.