Social Security 2025: 5 Upcoming Changes That May Impact Your Benefits
Written by
Caitlyn Moorhead
Edited by
Melanie Grafil
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Fall is the season that lets you know this part of the year will be a slingshot through the holidays. Before these celebrations are in full swing, it’s good to have all of your financial ducks in a row, and for retirees, even better to know what type of Social Security benefits you can plan on. Several key changes to Social Security are on the horizon, and these adjustments can help you plan more effectively for your future financial security.
Social Security is a very fluid program, with some kind of change implemented just about every year. That was the case in 2024 and will be in 2025, as well. The biggest projected change affecting benefits this year is a cost-of-living adjustment (COLA), but it’s not the only one.
New COLA
This year’s 3.2% cost-of-living adjustment pushed the average Social Security retirement check to $1,864.52 a month as of March 2024, according to the Social Security Administration. The 2024 COLA represents a decline of nearly two-thirds from last year’s adjustment but is still above the 2.6% average over the past couple of decades. All Social Security recipients will feel an impact, though it varies depending on factors, such as your type of benefit and when you claimed it.
After 2024, your Social Security cost-of-living adjustment is projected to be smaller. In fact, according to Kiplinger, the estimated COLA for 2025 is 2.57% based on this year’s inflation, which is almost a whole percentage down. Though inflation is slightly lower, it doesn’t mean food costs or skyrocketing housing prices are dropping anytime soon.
Quick Take: How Is the COLA Calculated?
The Consumer Price Index, or CPI, is one of the main indicators of a broader scope of retail prices and the biggest factor considered with inflation. The CPI-W measures price changes for goods and services, such as medical care, food costs, energy and more, reported by the Bureau of Labor Statistics.
Below, you can find some projected changes for Social Security benefits.
| Type of Beneficiary | Average Monthly Increase Projected in 2025 | Average 2025 Check Amount Projections |
|---|---|---|
| Retiree | $49.87 | $1,968.15 |
| Retired couple who both receive benefits | $99.75 | $3,936.31 |
| Disability workers | $39.98 | $1,577.68 |
| Widowed beneficiaries | $46.39 | $1,830.48 |
| Children of deceased workers | $28.73 | $1,134.05 |
Spousal Benefits
A Social Security spousal rule that has been around for decades officially ends this year for everyone except those who were 70 on Jan. 1, 2024. The rule allows recipients to switch between their benefits and their spouse’s to receive the maximum amount. But unless you were born before Jan. 1, 1954, you won’t be able to take advantage.
Under the expired rule, the higher-earning spouse would claim spousal benefits at full retirement age, while the other spouse claims their own benefit. The higher earner would then switch to their benefits at age 70, which maximizes the monthly Social Security payment because of the delayed retirement credits. In addition, the lower-earning spouse would be able to claim a spousal benefit or keep their own, depending on which is higher.
Taxes on Higher Income
The maximum amount of earnings subject to the Social Security payroll tax rose to $168,600 in 2024 from $160,200 in 2023. Certain wealthy Americans have already felt the impact, because they have crossed the threshold, while others will feel it as the year goes on. While this doesn’t technically impact benefits, it does impact how much income certain workers net.
Though the Social Security tax limit is currently $168,600 in 2024, it’s indexed to inflation, so you can bet your retirement dollars that it will go up in 2025. Once the limit is increased next year, if you make more than this amount, you should plan on paying a higher tax bill.
Overpayments
After getting blowback last year for the way it handled overpayments to Social Security beneficiaries, the SSA recently tweaked the rules. Here are three ways the agency aims to simplify overpayments and help Social Security recipients save money:
- Lower repayment: As of March 25, the SSA will collect the greater of $10 or 10% of the beneficiary’s total monthly Social Security benefit to recover an overpayment. That’s way down from 100% previously. There will be some exceptions, such as when an overpayment resulted from fraud.
- Longer recovery period: If a beneficiary asks for a rate lower than 10%, the SSA will approve the request as long as the new rate will pay back the overpayment within 60 months, up from 36 months before the changes.
- Simpler appeal process: If a Social Security recipient believes the overpayment was not their fault and they’re unable to repay it, they may appeal the overpayment decision and/or the amount and ask the SSA to waive collection, and they will not have to repay anything while the waiver is pending. The SSA has also introduced new, more affordable repayment options.
Full Retirement Age
The full retirement age, or FRA, is the age at which you can claim 100% of your Social Security benefits, and unfortunately, the finish line seems to be stretching past how far many thought they would have to run. Here are some key takeaways for what could be changing for your Social Security — where your retirement timeline is concerned — based on the year you were born:
- 1958: In 2024, your FRA was changed to age 66 and six months.
- 1959: As of 2025, your FRA is age 66 and 10 months.
- 1960: The FRA is currently 67. However, discussions are ongoing about potentially raising the FRA even further, possibly to 68 or beyond, due to increased life expectancies.
Final Take To GO
The bottom line is that Social Security is a critical safety net for millions of Americans, and the potential changes coming in 2025 could have far-reaching implications for your benefits. Though 2024 hasn’t quite wrapped up yet, make sure you are budgeting out for any adjustments.
Whether you’re nearing retirement, already receiving benefits or planning ahead, it’s important to stay informed about these developments. Political landscapes evolve and economic conditions shift, so keep an eye on what Social Security reforms may be coming your way in 2025.
Vance Cariaga contributed to the reporting for this article.
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