Not just the COLA adjustment: these are the big changes coming to Social Security payments in 2025 (and they all affect you)
With the COLA adjustment, Social Security beneficiaries will see their monthly payments increase, but that’s not the only change coming in 2025
Every October, Social Security beneficiaries eagerly await the COLA announcement to see how their monthly checks will increase the following year. For 2025, with inflation decreasing, the annual cost-of-living adjustment will be 2.5%. This is a drop compared to the 3.2% applied last year.
However, next year’s payments may also be affected by three other significant regulatory changes that will impact not only retirees but also their spouses and survivors, as well as disabled workers and their family members.
Knowing this information can help retirees anticipate these changes to maximize their eligibility for the most benefits. Even active workers can benefit from these updates. Staying informed about the changes will help you better prepare for your future, accumulate Social Security credits, and understand how much of your salary will be subject to the Social Security Tax.
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Here are the three changes coming to Social Security in 2025:
An increasing full retirement age (FRA)
Retirees will have to wait longer to reach their full retirement age. The FRA is gradually increasing to 67 years for those born between 1955 and 1960. In 2025, it will be 66 years and 10 months. For those who turned 66 in 2024, it is 66 years and eight months.
This is the year you will reach your full retirement age based on your year of birth:
- Those born in 1958 have an FRA of 66 years and 6 months, which they reached in 2024.
- Those born in 1959 have an FRA of 66 years and 10 months, which they will reach in 2025.
- Those born in 1960 or later have an FRA of 67 years, which they will reach from 2026 onwards.
Social Security credit requirements will increase in 2025
In 2025, you will need to earn more to receive a Social Security credit. In 2024, the amount is $1,730 per credit, also known as a “quarter of coverage,” but in 2025, this will increase to $1,810. You must earn 40 work credits to become eligible for benefits, and you can earn up to four credits per year.
This increase could primarily affect low earners or part-time workers, as the rise might mean you won’t receive the full four credits next year.
The wage cap for Social Security taxes will increase
The Social Security tax limit in 2024 is $168,600, and it is indexed to inflation. This means that the 2025 COLA will also impact the amount of taxable income on which you must pay Social Security taxes.
Next year, the maximum taxable amount will be $176,100.
READ ALSO: Here’s how much the average Social Security check will increase in 2025
*This article was written in Spanish and translated with the help of AI.