Significant changes to the program would make it more difficult to secure monthly benefits in the future.
One of the biggest misconceptions about Social Security is that everyone is entitled to a monthly benefit once they reach a certain age. But the program doesn’t work that way.
Generally speaking, the way you receive Social Security benefits in retirement is by working and paying into the program. Exceptions may exist for people who are not working but are eligible for spousal and survivor benefits. But if you want to make sure you receive these benefits in retirement, it’s important to make sure you’ve earned enough work credits over your lifetime.
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Specifically, Social Security requires a total of 40 work credits to qualify for benefits. However, the difficulty is that you can only earn up to 4 credits per year. This basically means you need to work in some capacity for at least 10 years to qualify for Social Security.
On the other hand, the value of work credits can change from year to year, and that’s exactly what’s happening in 2025.
Important changes to know about
On October 10, the Social Security Administration announced a number of important changes to the program that are scheduled to go into effect in 2025. One of the major changes is the 2.5% cost of living adjustment. The other is an increase in the wage cap for Social Security tax purposes, from $168,600 to $176,100 in 2024.
Another big change in 2025 is the value of a single work credit. Currently, you need $1,730 in earnings to earn one work credit. Next year it will cost $1,810. You should keep this in mind if you want to ensure that you can receive Social Security benefits in the future, even if you work part-time.
However, you should know that this change won’t really affect you if you work full time, even if you only earn minimum wage. If this is the case, if you work 50 hours a week and earn the minimum wage for 40 hours a week, you will have enough income to secure four labor units in 2025.
Be aware of changes to Social Security
Although Social Security has been around for a long time, the program tends to change every year. Regardless of age, it is beneficial to monitor them.
If you’re not nearing retirement, you may think there’s no need to bother reading about Social Security. But if you don’t understand what you need to do to receive benefits, you may be left without a vital source of income when you can’t work at all.
Of course, if you work too much part-time to accumulate 40 work credits over your lifetime, you may have to rely on someone else’s income, such as your spouse’s income. Based on your earnings record, you may be eligible to receive some Social Security benefits in the future. But it’s best to know the rules so you know what to expect when you become an adult.
