2025 Medicare Changes
Every year there are changes to Medicare Advantage Plans and Social Security. Most years the changes are not dramatic. But this year the change in your Medicare Advantage plan may be dramatic.
If you have a Medicare Advantage Plan, do not assume that your plan will remain the same for 2025. Because the annual out-of-pocket spending for Part D prescription drugs were capped at $2,000, the insurance companies have redesigned their plans and have also cancelled approximately 2,000,000 people. You need to make sure you are not one of those people who were cancelled. In addition, if your plan was not cancelled, they may have been changed.
In all likelihood, the premiums will still be zero, but the deductibles may be higher, and other parameters may have changed. So, in effect, your plan has been downgraded. You need to make sure you review your plan. On the plus side, if your Medicare Advantage Plan has been cancelled, you are now able to enroll in a Medicare Supplement Plan to replace it and have a guaranteed issue. This is not the year to assume your plan is the same. You don’t want to find out in January that your Medicare Advantage Plan was cancelled, and you are not insured. Bottom line: Review your Medicare Advantage Plan, you have until December 7, 2024.
2025 Social Security Changes
- Maximum Social Security benefit for 2025 is $4,018
- Maximum Social Security benefit including Delayed Retirement Credits for 2025 is $5,108
- 2025 COLA-2.5%
- Maximum taxable wages-$176,100
- Maximum quarter for coverage-$1,810
- Annual Earnings Limitation-$23,400
- Monthly Earnings Limitation-$1,950
- Annual Earnings Limitation in the year you reach full retirement age-$62,160
- Monthly Earnings Limitation in the year you reach full retirement age-$5,180
Other Social Security Considerations
- Do not listen to your friends for advice. Every situation is different. Seek professional advice to maximize your lifetime benefits.
- Review your earnings records annually to make sure they are correct.
- Not contributing to FICA today will reduce your Social Security benefits in the future.
- Other government pensions (non-covered pensions) can reduce the benefit reported on your Social Security statement through the Windfall Elimination Provision or the Government Pension offset.
- You can go to any Social Security office you want.
- You can voluntarily have federal income tax withheld from your benefit. To accomplish this, you need to file a W-4V. You can withhold either 7%,10%,12% or 22%.
- Common law marriages are different in every state.
- If you need to, you can withdraw your application for benefits within 12 months, but you need to pay back all benefits received.
- File for benefits 2-3 months before you want the benefits to start. Do not wait to gather all necessary documents. The critical date is the date you file, not the date you have all your documents.
- If you get a phone call from Social Security and are not expecting one, hang up. Social Security will not randomly call you. A Social Security representative will only call you if your application is in process or you have made an initial phone call to them.
- Finally, set up your online account ASAP. You can even lock down your account with a password. The reason to do this is so you can check to see if your yearly earnings are posted correctly and prevent fraud. Once you have set up your account, it becomes harder to hack.
Remember, take the wrong benefit at the wrong time, it’s always smaller and forever.