One omnipresent fact about saving and planning for retirement is that, for most people, the task is known to be an important one — but it also involves some complicated details.
Personal finance bestselling author Suze Orman offers some valuable insight on some of those specifics as she helps retired people understand how to handle a few key components about their Social Security benefits.
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During the years they are working, Americans often save and invest money through employer sponsored 401(k) plans. They also frequently invest a portion of their income in Individual Retirement Accounts (IRAs).
These investments help provide people with income during their retirement years so they are not entirely dependent on Social Security paychecks to fund their preferred lifestyles.
Related: Here's the average Social Security benefit for married couples in 2025
Another financial consideration for retirees is to be sure they are living in a home suitable to their desires. This can mean relocating or staying in their current living arrangement, but that decision depends on financial needs as well as personal ones.
Planning for Medicare enrollment is also an important component of retirement spending. Premiums, copayments, deductibles, prescription drug costs and long-term care insurance are all parts of the equation.
Considering these particulars, finance media personality Suze Orman keeps retirees updated on some Social Security facts of which they should be aware as 2025 approaches.
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Suze Orman explains how Social Security benefits will change in 2025
Orman points out that Social Security recipients will receive a relatively small increase to their paychecks beginning in January.
The adjustment will be a 2.5% boost to take inflation into consideration. And that is the smallest upward adjustment for Social Security payments since the pandemic-influenced year of 2021.
The personal finance media personality bluntly explains to retirees why the smaller increase is not necessarily the disappointment it appears to be at first glance.
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"A smaller inflation adjustment can feel disappointing — we all want more money to cover living expenses — but it’s actually good news," Orman wrote. "It reflects that we are no longer dealing with basic expenses rising at a fast rate."
Orman points out the fact that Social Security recipients got a large cost of living adjustment (COLA) in 2023 (8.7%), but that was a reflection of the abnormally high inflation Americans experienced in 2022.
The author makes another important point: The COLA is not be used as an excuse to claim Social Security benefits early.
People can choose to collect Social Security benefits at age 62. But waiting until one's full retirement age (66 or 67 years old), or even age 70, will result in much larger monthly paychecks.
Once a person reaches age 62, Orman notes, Social Security will credit his or her account with each year's cost of living adjustment. That comes even if the potential recipient hasn't yet claimed his or her benefit.
"So now you have one less reason to feel the itch to claim an early (reduced) Social Security benefit," Orman wrote.
Related: Dave Ramsey has blunt words on Medicare for retired Americans
Suze Orman discusses another 2025 Social Security adjustment
People who continue to work while they are collecting Social Security benefits may also see reduced benefits.
Recipients who are still working, who have not yet reached their full retirement age, will experience reduced benefits by one dollar for every two dollars earned more than the 2025 level of $23,400, Orman noted.
But once a person reaches their full retirement age, no benefit reductions will be applied, no matter matter how much they make while working.
And there is one other change of which to be aware. For people who are working while receiving Social Security benefits, the amount of their earnings that will be subject to the 2025 Social Security tax rises to $176,100.
So any amount earned below that level will have to pay that tax, and any amount above it will not.
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