Here Are the Changes to Social Security This Year

Social Security is a program that millions of retired seniors depend on heavily. Because of this, it’s important to stay apprised of changes to it — whether you’re no longer working or have many years ahead of you until your retirement arrives. With that in mind, here are the different ways Social Security has changed in 2025.

1. Benefits rose 2.5%

Each year, Social Security benefits are eligible for an automatic cost-of-living adjustment (COLA). The purpose of COLAs is to make sure that beneficiaries are able to keep up with their expenses as inflation drives living costs up.

In January, Social Security benefits rose 2.5%. And while that happens to be the smallest increase in years, the reason for it is that inflation has finally started cooling.

With that 2.5% COLA, Social Security’s maximum monthly benefit at full retirement age (FRA) is now $4,018. Most recipients, however, end up collecting much less.

In fact, as of January, the average monthly Social Security benefit was only $1,976. That number is likely to creep upward slightly from month to month. But for the most part, it’s only people who earn a lot of money throughout their careers who wind up eligible for the maximum monthly benefit Social Security will pay out.

If you want to boost your Social Security, one key thing to do is delay your claim past FRA. For each year you do, your benefits are boosted by 8%, up until you turn 70.

2. The earnings-test limit rose

Social Security lets recipients work and collect their benefits at the same time. Once you reach FRA, it doesn’t matter how much your job pays you. At that point, you won’t have to worry about withheld benefits. But when you work and collect Social Security before FRA, the earnings-test limit comes into play.

In 2025, the earnings-test limit rose to $23,400, up from $22,320 in 2024. And for those reaching FRA in 2025, the earnings-test limit increased to $62,160, up from $59,520 last year.

Beyond these thresholds, Social Security is withheld to some degree, so that’s something to be mindful of. That said, withheld benefits due to exceeding the earnings-test limit are not forfeited forever. You start to get that money back once you reach FRA.

3. The wage cap increased

Social Security relies on payroll tax revenue to stay afloat. But workers don’t necessarily pay into the program on every single dollar they earn.

Each year, a wage cap is set that dictates how much income is taxed for Social Security purposes. In 2025, the wage cap is $176,100, up from $168,600 in 2024.

It may seem unfair that Social Security lets very high earners off the hook to some degree. But remember, the program also has a maximum monthly benefit. So higher earners may not pay taxes on all of their income, but there’s also a limit to what monthly benefit they can get.

4. The value of work credits increased

To be able to get Social Security as a retiree, you need to earn 40 work credits in the course of your career. And you’re allowed to earn up to four credits per year.

The value of a work credit can change from one year to the next, though. And in 2025, it takes $1,810 in earnings to collect one work credit, up from $1,730 in 2024. If you work very part-time, you may want to track your earnings carefully to make sure you’re able to get the work credits you’re aiming for.

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