Title: 2025 Spousal Social Security Benefits: Key Updates Every Married Couple Should Understand
Welcome to the upcoming changes in Social Security benefits for 2025! While the primary focus often falls on retirement benefits and contributions, spousal benefits also undergo modifications. Here's a sneak peek at two significant changes you can expect:
1. 2.5% Cost-of-Living Adjustment (COLA)
Jumpstarting the year, Social Security benefits saw a 2.5% boost due to the Cost-of-Living Adjustment (COLA). This adjustment aims to maintain parity with inflation, even though there are concerns that buying power hasn't kept pace with these adjustments.
As of November 2024, the monthly spousal benefit stood at approximately $909. Adding the 2.5% COLA result in an estimated $932 per month. However, over time, the average benefit tends to grow slightly, so the actual average in January 2025 might be slightly higher. Those receiving more than $909 in November 2024 can anticipate a larger increase, since COLAs are calculated as a percentage of your checks, not a flat rate.
If you've received your initial check with the new benefits, those born between the 21st and 31st of the month will receive their first 2025 check on January 22.
2. Higher Full Retirement Age (FRA) for 1959 Birth Cohort
Every Social Security beneficiary, whether they're retirees or spouses, is assigned a Full Retirement Age (FRA) based on their birth year. For years, that age was 66. Gradually, it has started to increase due to legislative changes enacted decades ago.
Individuals born in 1958 reached their FRA of 66 and 8 months at the tail end of 2024, with a few from the early end of the birth year reaching FRA of 66 and 10 months in 2025.
While this might seem like a minor adjustment, it plays a significant role in the amount of benefits received. If you claim benefits before reaching your FRA, a penalty is imposed, with the amount of reduction varying based on the number of months of early claiming. For retirees, this penalty is 5/9 of 1% per month for up to 36 months, and then 5/12 of 1% thereafter. Spouses, meanwhile, endure a steeper penalty of 25/36 of 1% per month for up to 36 months, followed by 5/12 of 1% per month.
If you've already claimed benefits prior to reaching your FRA, these penalties have already been applied. However, if you're yet to apply and hope to maximize your spousal benefits, it's advisable to wait until reaching your FRA.
Mind you, do not delay your application beyond this point. Social Security retirement benefits offer delayed retirement credits that can boost benefit amounts if applied after the FRA, up to age 70. Unfortunately, spousal benefits do not grant this advantage. The maximum spousal benefit is what you qualify for at your FRA.
Should you have any questions regarding how your spousal benefits may be impacted, it's best to contact the Social Security Administration for clarification. You can do so online, over the phone, or by scheduling an appointment with your local Social Security office.
The 2.5% Cost-of-Living Adjustment (COLA) in 2025 might help improve your retirement finance, as it could increase your monthly spousal benefit from approximately $909 to an estimated $932. It's crucial to plan your retirement savings strategy taking into account these changes and the Full Retirement Age (FRA) adjustments, as delaying your application beyond your FRA can provide higher benefits for retirees, but not for spouses.
