In 2025, Social Security will see changes including a smaller cost-of-living adjustment, a higher full retirement age, and increased taxes for high earners.
Social Security 2025: Prepare for Lower COLA and Increased Retirement Age-Impacting Retirees
According to The Motley Fool, in 2025, Social Security will change in ways that could affect both retirees and workers. One major change is the cost-of-living adjustment (COLA) for retirees, which is expected to be around 2.63%, lower than in recent years. Although this is an increase, it may not be enough to keep up with rising prices, so retirees might need to adjust their spending or find other ways to earn money.
Another important change is the full retirement age, which will be 66 years and 10 months for those turning 66 in 2025, and 67 for people born in 1960 or later. This means people close to retirement need to plan carefully to avoid getting lower benefits if they start too early.
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$168,600 to $175,500: Social Security Changes to Impact Retirees and Workers in 2025 (PHOTO: La Grada)
Social Security 2025: Higher Income Limits Mean Increased Taxes for High Earners
High earners will also see a change, as the income limit for Social Security taxes will rise from $168,600 to about $174,900 or $175,500 in 2025. This means that more of their income will be taxed, leaving them with less money in each paycheck. Both retirees and workers need to start preparing for these changes now to avoid any financial surprises next year.
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