4 Social Security Changes Retirees Need to Know About in 2025
Personal Finance
The Motley Fool

4 Social Security Changes Retirees Need to Know About in 2025

July 28, 2025
05:23 AM
4 min read
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Interestingly, 2025 is more than halfway over, yet changes to important grams Social Security remain a hot topic. That may be due to recent drama from the nation's capital or...

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personal finance

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Published

July 28, 2025

05:23 AM

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The Motley Fool

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Interestingly, 2025 is more than halfway over, yet changes to important grams Social Security remain a hot topic

That may be due to recent drama from the nation's capital or because current workers are keeping an eye on Social Security, ensuring they'll be ready for retirement when the day comes

Nevertheless, Here are five changes for 2025

Image Source: Getty Images

Nevertheless, Cost-of-living adjustment If you're already retired, you're undoubtedly aware that the cost-of-living adjustment (COLA) boosted benefits by 2 (something worth watching). 5% in January

However, COLA increases are tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) and were initially designed to fight inflation (quite telling)

Furthermore, Whether your 2, amid market uncertainty

On the other hand, Nevertheless, 5% increase has kept pace with the year-over-year inflation rate of 2. 7% may depend on where you and how inflation has impacted your area

Maximum taxable earnings increase Social Security taxes are calculated as a percentage of your gross earnings

Additionally, However, it's only up to a specified amount, in light of current trends

Meanwhile, For example, workers are responsible for paying Social Security taxes on the first $168,600 earned in 2024 (noteworthy indeed), given the current landscape

This year, workers will pay taxes on the first $176,100

Maximum Social Security benefits age increase One factor in how much you can receive in Social Security benefits is your age (this bears monitoring)

To make things a little more confusing, full retirement age (FRA) varies by birth year

Claiming Social Security once you hit FRA means receiving full benefits, while claiming earlier permanently reduces your benefits

Additionally, Conversely, However, benefits increase by 8% each year you delay retirement past your FRA (up to age 70)

Here's where the increase in age for FRA comes into effect: Those born in 1958 hit FRA at age 66 and six months

Additionally, Anyone born in 1959 will reach FRA at 66 and 10 months

Individuals born in 1960 or later must wait until age 67 to hit FRA

Earnings test: Allows you to earn more in 2025 If you continue to work while collecting Social Security benefits, you may carefully be watching your earnings threshold, in today's financial world

That's because earning over that threshold means the Social Security Administration (SSA) steps to withhold some of your benefits, in light of current trends

In contrast, How much is withheld depends on your age

For example: If you haven't reached FRA: SSA will temporarily withhold $1 of benefits for every $2 earned over $23,400 (up from a threshold of $22,320 in 2024), in today's financial world

Moreover, If you reach FRA in 2025: If you're going to reach FRA anytime in 2025, there's a special withholding limit for you, in this volatile climate

Furthermore, SSA will only withhold $1 in benefits for every $3 earned above $62,160 (up from $59,520 in 2024)

This applies only to money earned in months prior to your birth month

For example, if you were born in October, only earnings from January through September will apply, given current economic conditions

Anything earned in October and beyond is exempt from the earnings test because you've reached FRA, considering recent developments

If you reached FRA before 2025: You can earn as much as you'd without worrying benefits being withheld (which is quite significant), considering recent developments

Nevertheless, However, the money withheld isn't lost, given current economic conditions

Moreover, SSA simply holds onto it until you reach FRA when it's added back into your Social Security checks, permanently increasing your benefit amount

Whether Social Security benefits vide a large portion of your retirement income or barely play a role, it's a good idea to watch for changes -- if for no other reason than to keep up with your household budget.