The Social Security Administration (SSA) recently announced big changes to the program that will affect tens of millions of seniors who get monthly payments.
These changes will happen in 2025. For many retirees, Social Security benefits are an important part of their overall salary.
So, people who get benefits need to know about any changes to the program that might impact, among other things, how much money they get in benefits and how it is taxed or calculated.
From now until 2025, this is what every senior needs to know about Social Security. If you live in the United States and get monthly retirement benefits, find out more about the new legal changes and how they will affect your benefits.
Social Security has confirmed new changes for retired workers in the US
One good thing is that people will get bigger Social Security checks. After seeing the inflation numbers for September, the Social Security Administration (SSA) revealed a 2.5% cost-of-living adjustment (COLA).
This means that the average monthly Social Security payment for retired workers will go up from $1,920.48 in August to about $1,968.50, which is $23,622 a year.
The COLA is changed every year to help seniors keep up with inflation. The rate of inflation has gone down this year after being unusually high for three years. The rise in 2025 will be the lowest in four years.
The COLA has been going down since the beginning of time, with an average decrease of 2.5% since 2000. This is concerning because the nonpartisan Senior Citizens League has kept a close eye on how benefits have lost their buying power over time.
Age plays a big role in Social Security payments, and people can start getting them as early as age 62. But your benefits go down more quickly if you start getting them early.
On the other hand, they go up faster if you start getting them later, but only until age 70. They wait until the right time to claim their full retirement amount (FRA) because of this.
People who were born in 1957 or 1958 may reach their FRA this year at 66 and 6 months or 66 and 8 months. In 2025, retirees born in 1958 or 1959 will not reach their FRA until they are 66 years and 8 months, or 66 years and 10 months.
This is because the FRA is going up. In other words, they will have to wait a little longer before they can start getting payments at their FRA. Based on information from the Social Security Administration, this is the full retirement age over time:
| Birth Year | Full Retirement Age |
| 1943-1954 | 66 |
| 1955 | 66 and 2 months |
| 1956 | 66 and 4 months |
| 1957 | 66 and 6 months |
| 1958 | 66 and 8 months |
| 1959 | 66 and 10 months |
| 1960+ | 67 |
Social Security beneficiaries should be aware of the new income thresholds
The Social Security Administration (SSA) will raise the tax thresholds for people who earn more than $168,600 next year, to $176,100. But there are other important changes that users should think about in 2025 as well.
If a retiree starts getting benefits early but still works, some of their payments will be held back until they hit the full retirement age.
Withholding is based on a test of earnings, with a lower limit for retirees who will not reach full retirement age (FRA) this year and a higher limit for those who will. Withheld benefits are returned after hitting FRA.
Along with that, those salary caps will go up in 2025. For example, if you do not reach your FRA in 2025, the SSA will take away $1 in payments for every $2 you earn over $23,400.
This is 4.8% more than in 2024. If you do reach your FRA in 2025, the SSA will take away $1 from your benefits for every $3 you earn over $62,100. This is 4.3% more than the cap in 2024.
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