9 Reasons Your Social Security Check Could Get Smaller in 2025
First the good news. Price growth seems to be cooling across the economy.
Check Out: I’m an Economist — Here’s My Prediction for Social Security If Kamala Harris Wins the Election
Read Next: 7 Reasons Future Retirees Should Consider a Financial Advisor
While that’s good news for a lot of people, it may be coming at a bad time for retirees living on Social Security. According to CNBC, “While that is good news for consumers, the timing of this progress on inflation could end up short-changing seniors and other Social Security recipients when they learn their annual cost-of-living increase later this year.”
Since the Social Security Administration calculates the annual COLA change using numbers from July, August and September, a cooling off in prices could mean a smaller increase that lags behind the overall pace of inflation.
This comes on top of other concerns about the future for Social Security, its reserves and what the winner of the presidential election will do for retirees.
Here’s a look at some other reasons you could see a lower Social Security payment.
Learn More: 8 States To Move to If You Don’t Want To Pay Taxes on Social Security
Income Limits
Your payment might move lower if you still work and your earnings take you above a certain income limit. According to U.S. News & World Report, “Beginning the month you reach full retirement age, your earnings will no longer reduce your Social Security benefit, no matter how much you earn.”
Back Income Taxes Owed
Your payment might also be lower if creditors garnished part of it because you owe back income taxes, defaulted on student loans or have unpaid alimony or child support.
Medicare
Medicare can also play a part in how much you receive from Social Security. If you already collect Social Security and then enroll in Medicare at age 65, the premiums for Part B are automatically taken out of your monthly payment. You can also choose to have other Medicare premiums taken directly out of your Social Security benefits.
Federal Income Tax
If you’re a Social Security beneficiary with an annual income above a certain level, you pay federal income tax on a percentage of your Social Security income. You might choose to have the taxes withheld from your monthly benefit payment instead of paying at tax time.
Government Pension
This one may apply to you if you have a pension from a job in which you didn’t pay Social Security taxes. This could apply to retirees who worked for state or local government agencies.
Benefit Overpayment
If your previous benefit payments were higher than they should have been, the SSA might withhold the overpayment amount from future payments. This could happen if you qualify for Supplemental Security Income (SSI).
Family Maximum
You might also see a reduction in spousal and survivor benefits due to the family maximum benefit. That caps how much a family can collectively receive from Social Security on the basis of one member’s earnings record.
Workers’ Compensation
The combined total of workers’ comp and SSDI payments can’t amount to more than 80% of what the SSA determines to have been your average earnings before you became disabled. If they do, one or the other benefit will be reduced to get under the cap.
More From GOBankingRates
What a Trump Presidency Could Mean for Social Security in 2025
Shop Online? Here's How to Get 3% Cash Back For Things You Already Buy
6 Subtly Genius Things All Wealthy People Do With Their Money -- That You Should Do, Too
This article originally appeared on GOBankingRates.com: 9 Reasons Your Social Security Check Could Get Smaller in 2025
