2025 changes to social security
January 15, 2025
Social Security is more than a retirement program. It also provides important life insurance and disability insurance protection to millions of Americans. If you receive any type of social security benefit, you should be aware of these changes to Social Security for 2025.
1. Cost of Living Adjustment (COLA)
COLA for 2025 is 2.5%. The Social Security Administration estimates the average retirement benefit to increase by $49 a month. That’s not as high as COLA in past years, mainly because inflation cooled down a bit in 2024.
2. Medicare Premiums
The standard Medicare Part B premium is going up from $174.70 to $185 a month. Since most people have this amount taken right out of their Social Security payments, the increase will chip away at the cost-of-living adjustment (COLA) by about $10.30 each month. Part B covers things like doctor visits and outpatient care, so it’s something many Americans rely on.
3. Government Pensions
Here’s some good news for people with pensions from jobs that didn’t pay into Social Security. Congress repealed the WEP and GPO policies that ended more than 40 years of reduced Social Security benefits for people in your situation. The Social Security Administration is evaluating how to implement the repeal and will provide updates on a dedicated page on its website. You may have some additional compensation coming, so check out that website.
4. Social Security Offices Require an Appointment
As of January 6, 2025, all Social Security field offices require you to make an appointment instead of just showing up. This is expected to reduce wait times and provide better service. To make an appointment, call 800-772-1213 or access your Social Security account online.
5. Full Retirement Age
Full retirement age (FRA) is when you can claim your full Social Security benefit. It’s 66 and 8 months for those born in 1958, 66 and 10 months for people born in 1959 and 67 for anyone born in 1960 or later. You can start benefits as early as 62, but they'll be permanently reduced. Or, you can wait until age 70 to get up to 8% more per year.
6. Social Security Taxes
Social Security is funded by a 12.4% tax on wages—split between you and your employer (6.2% each). If you're self-employed, you pay the full amount. In 2025, the tax applies to earnings up to $176,100, up from $168,600 in 2024. Income above that or from investments isn’t taxed.
7. Social Security Earnings Test
If you collect Social Security before full retirement age (FRA) and keep working, some benefits may be temporarily reduced if your earnings exceed a certain limit. In 2025, $1 is withheld for every $2 earned over $23,400 (up from $22,320 in 2024). For example, earning $40,000 in 2025 would reduce your benefits by $8,300.
The rules ease in the year you reach FRA, with $1 withheld for every $3 earned over $62,160. Once you hit FRA, there’s no reduction, and your benefits are adjusted to recover withheld amounts over time.
For SSDI recipients, income limits are stricter. In 2025, most can earn up to $1,620 a month ($2,700 if blind) without losing benefits.
8. Qualifying for Social Security Benefits
To qualify for Social Security retirement benefits, you need 40 credits, which most people earn after about 10 years of work. In 2025, you’ll earn one credit for every $1,810 in income, up to four credits a year once you’ve earned $7,240.
AlliedFCU is providing this informational for educational purposes. If you have questions or need additional information, visit the Social Security Administration website.
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