Upcoming Changes to Social Security in January
Category: Social Security
- 06 Nov 2024
- Posted By WebSiteAdmin
We are in the fourth quarter of the year which means this is when Social Security begins announcing changes to any policies or procedures for the upcoming year. People typically tend to pay attention to these announcements because of COLA (Cost of Living Adjustment). With products and services getting more expensive it is important that the SSA increase payment amounts to compensate.
COLA is calculated by using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This index crunches data and analyzes the cost of every day items by regular every day folks. It does so in quarter 3 of the year (July – September to be exact).
The COLA increase was set at 2.5% and will begin in January. Even though many people don’t view it as enough of an increase, the good news is that inflation is cooling and they will revisit the COLA situation in quarter 3 of 2025.
The truth is that people expected more than 2.5% based on the previous three year’s number. Here they are:
| Year | COLA increase |
| 2015 | 1.70% |
| 2016 | 0% |
| 2017 | 0.30% |
| 2018 | 2% |
| 2019 | 2.80% |
| 2020 | 1.60% |
| 2021 | 1.30% |
| 2022 | 5.90% |
| 2023 | 8.70% |
| 2024 | 3.20% |
As you can see, 2.5% is well below the numbers of the past three years.
Earning Base Limit Increase
The wage base limit is simply defined as the highest amount of your income that is subject to Social Security payroll taxes. For 2025, that new limit is set at $176,110. Basically, every dollar earned above this amount is free from Social Security payroll taxes.
This number has seen a large spike in the last ten years due to the massive rise in the cost of living and of course, inflation. The amount was $118,500 just ten years ago.
