As 2025 approaches, many Social Security changes are set to take effect in January. Many of these changes will have a direct impact on your benefit amount, potentially affecting your checks by several hundred dollars per month. Here are three ways to collect bigger checks in the new year.

1. The new COLA will come into effect – with a major positive side

Retirees can expect to receive a 2.5% bonus cost of living adjustment (COLA) in 2025. The average retiree receives about $1,925 per month, according to the most recent data from the Social Security Administration, which equates to an increase of about $48 per month.

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However, it is not only people receiving a retirement pension who will benefit from the bonus. Elderly collection spousal benefitsDisability benefits or survivors’ benefits will also earn the 2.5% COLA starting in January.

Next year’s COLA will be the lowest in several years, but the positive side is that this means inflation is also slowing. The COLA is directly linked to changes in the consumer price index. While a smaller increase may seem disappointing, the good news is that everyday expenses are slowly becoming more affordable, which can help you keep more of your benefits in retirement.

2. Maximum benefit reaches record level

In 2024, the maximum Social Security benefit is $4,873 per month. However, starting in January, the most you can collect in benefits is $5,108 per month – the highest payment on record.

To reach the maximum payments, you must meet three conditions: work for at least 35 years, delay benefits until age 70, and consistently meet the taxable income limit (which is the highest income subject to income tax). social security). . In 2025, this limit will be $176,100 per year.

If you’re already retired and receiving benefits, this change probably won’t affect you. But if you plan to retire in 2025 or beyond, you could potentially receive a higher benefit than in 2024.

3. People working in retirement could keep more of their benefits

You can continue to work part-time or full-time after receiving social security, but if you are younger than your full retirement age (FRA) – which corresponds to the age of 67 for anyone born in 1960 or later – you may be refused part of your benefits.

Your earned income will be subject to retirement income testand there are two different limits, depending on whether you are well below your FRA or will reach your FRA in 2025:

• If you will be under your FRA in 2025: Your benefits will be reduced by $1 for every $2 above the limit of $23,400 per year.
• If you reach your FRA in 2025: Your benefits will be reduced by $1 for every $3 over the limit of $62,160 per year. Only the income you earn in the months before your FRA will count toward the limit.

Both of these caps will be slightly higher in 2025 than in 2024. The smaller cap will increase by $1,080 per year, while the larger cap will increase by $2,640 per year. This means you can earn more before facing benefit cuts.

It is important to note that these deductions are only temporary and your benefit amount will be recalculated with your FRA. But in the short term, higher earnings limits can help you keep more of your benefits if you continue working in retirement.

A new year means a revamped Social Security program. Although many of these adjustments are relatively small, they can have a major impact on your monthly benefit. By keeping an eye on these changes for 2025, you can prepare your budget accordingly.