For many people who are working now, retirement may seem like a pipe dream. As people reach this point in their lives, they will have more time to spend with their families and do the things they enjoy.
With that said, having more cash on hand might be necessary to cover other costs, like medical bills, based on your situation.
These extra costs will eat away at your savings over time, which is why many seniors start looking for ways to make money besides the monthly Social Security checks they get.
People are racing to think of new ways to use the skills they have learned at work or their assets to get a better return on their investments.
But in the United States, income is not spread out evenly. Because of this, not all seniors have a lot of money saved, let alone an emergency fund. As of 2023, the US Census Bureau said that at least 36.8 million people were living in poverty.
This number was not very different from the one in 2022. And so the Supplemental Poverty Measure went up by 0.5% to 12.9%.
This is made up of cash income and government benefits like the Supplemental Nutrition Assistance Program (SNAP), which is sometimes called “food stamps.” In other words, more people needed help from the government over time.
You do have other choices, though, as a senior, and we are here to tell you that the Social Security Administration (SSA) is always changing, as it does every year. You should be aware of all these changes so that you can save as much money as possible.
Which changes are approaching for retirees?
First, there is a change that has been talked about all through the fourth quarter of the year and will happen on December 31st. Cost of living adjustments, or COLAs, are meant to change your monthly Social Security check so that all seniors get more money every time.
But there is one very important caveat. In the sense that you will have more “real” money, it does not mean that you are getting rich. Instead, it keeps you from getting poorer over time (keeping your wealth is the same thing as not losing your money).
COLA acts as a wall to keep inflation from happening. During the course of the year, the business goes through many changes.
These are affected by things like the amount of goods being made, changes in politics, international trade deals, global conflicts, and even the weather.
Prices usually go up over time because of this, which forces wages to rise to keep up with the cost of goods and services. People who are retired would always be hurt because their main source of income, Social Security payments, did not go up.
As a result, the senior’s ability to buy things was constantly decreasing. Before 1975, price changes were dealt with by different kinds of congressional acts. COLA set up a regular way to do things.
That is why the COLA for 2025 is good for all seniors, even though it is not a big help. Your pay will go up by 2.5%, which might not seem like much, but now that you know more about it, it means that inflation is not as bad as it was in the past.
Because of the COLA raise, there is a second change that will help retirees. As you know, COLA not only raises the amount of money that Social Security gives out, but it also raises other values that are important to the program’s daily operations.
The Earnings-Test Limit (ETL) is one of these. It is the most money you can make before the Social Security Administration will punish you if you quit before your FRA. If you earn more than that, the SSA will take away $1 in benefits for every $2 you earn.
Do not worry, they will pay you back after your FRA. For 2025, $23,400 for people who reach the Normal Retirement Age (NRA) after that year and $62,160 for people who reach that age this year.
