Here are big changes retirees can expect from Social Security and Medicare in 2025

Key Points

  • President Joe Biden is expected to sign a bill that will increase Social Security benefits for certain pensioners.
  • The annual Social Security cost-of-living adjustment (COLA) for 2025 will be 2.5%.
  • Medicare Part D enrollees will benefit from a $2,000 annual out-of-pocket cap on prescription drug costs.
  • Monthly Medicare Part B premiums will increase to $185 in 2025.
  • The Social Security trust fund depletion dates are getting closer, with potential impacts on future benefits.

Summary

In 2025, significant changes are on the horizon for Social Security and Medicare beneficiaries. President Joe Biden is poised to sign a bill that will enhance Social Security benefits for certain pensioners, particularly those with pensions from public service jobs. This legislation, known as the Social Security Fairness Act, aims to eliminate provisions that reduce benefits for individuals with pensions from work where Social Security taxes were not withheld. Additionally, all Social Security beneficiaries will see a 2.5% increase in their benefits due to the annual cost-of-living adjustment (COLA), although this is lower than the previous year's adjustment. On the Medicare front, enrollees will face a $10.30 increase in Part B premiums, setting the new standard at $185 per month. A significant relief for Medicare Part D enrollees comes in the form of a $2,000 cap on out-of-pocket prescription drug costs, part of the Inflation Reduction Act. However, looming over these changes is the concern about the Social Security trust fund's depletion, projected to occur by 2033 for retirement benefits, potentially affecting future benefit payments unless legislative action is taken.

cnbc
January 4, 2025
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