5 Social Security Changes You Missed This Year

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If you’re someone who follows financial news, you may have seen the words “Social Security” on a number of occasions this year. Even though Social Security has been around for many decades, the program doesn’t always stay the same from one year to the next.

There are actually a number of major changes you may have missed in 2025. Let’s dive in so you’re up to speed.

1. Benefits rose 2.5%

Social Security benefits are eligible for a cost-of-living adjustment, or COLA, each year. The reason for this is that living costs tend to rise over time due to inflation.

Without COLAs, seniors on Social Security would be guaranteed to lose buying power. Instead, COLAs help Social Security recipients keep up with rising costs — at least in theory.

In 2025, Social Security benefits received a 2.5% COLA. Historically speaking, that’s not a terrible raise, but it is a bit smaller than recent COLA numbers we’ve seen.

The reason, though, is that inflation has cooled a bit since peaking after the pandemic. So while seniors on Social Security tend to prefer larger COLAs, and understandably so, smaller COLAs aren’t terrible. The reason? They tend to go hand in hand with a more manageable level of inflation.

2. The earnings-test limits increased

The Social Security Administration allows seniors to collect benefits even if they’re still working. But if you earn too much, your monthly Social Security checks could shrink.

Once you reach full retirement age (FRA), you don’t have to worry about the program’s earnings-test limits. Until then, they’re important numbers to know, since they tell you how much you can earn before risking having benefits withheld.

In 2025, the earnings-test limit rose to $23,400, up from $22,320 in 2024. For people reaching FRA in 2025, the earnings-test limit increased to $62,160, up from $59,520 in 2024. Earnings beyond these thresholds typically result in withheld benefits that are repaid once FRA arrives.

3. The wage cap went up

Social Security’s primary revenue source is payroll taxes. But there’s a limit as to how much income is taxed to fund Social Security.

In 2025, the wage cap for Social Security rose to $176,100, up from $168,600 in 2024. This means that someone earning $176,100 and someone earning $500,000 pay the same amount of Social Security tax this year.

Clearly, this change only impacts higher earners. Anyone earning an average salary is likely paying Social Security taxes on their entire annual paycheck.

4. It became harder to qualify for benefits

People tend to assume that Social Security is available to everyone once they reach a certain age. That’s not true, though.

Workers have to earn Social Security benefits by paying taxes on wages and accumulating work credits as a result. In 2025, the value of a single work credit rose to $1,810, up from $1,730 in 2024. This means that it’s technically harder to qualify for Social Security in retirement.

However, it only takes 40 lifetime work credits to get Social Security. And workers can only accumulate up to four credits per year. It’s possible to qualify for benefits even on very part-time wages, but it’s important to know what work credits are worth each year nonetheless.

5. The Social Security Fairness Act was passed

It used to be that retirees who were entitled to certain government benefits could not collect their Social Security payments in full. But earlier this year, the Social Security Fairness Act took effect. And with that, two provisions that commonly resulted in reduced benefits were eliminated — the Windfall Elimination Provision and the Government Pension Offset.

Now, a few million retirees are eligible for more Social Security. And they should expect to see lump sum payments to make up for previously withheld benefits. Or, it may be that your money has arrived already. If you think you were entitled to a retroactive payment, log into your Social Security account to investigate, or check your bank account to see if there’s a surprise payment waiting.

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