The Social Security Administration (SSA) has announced several key updates for 2025, including adjustments to the Full Retirement Age (FRA), taxable earnings limits, work credits, and benefits. Here’s what you need to know.
Full Retirement Age Adjustments
The Full Retirement Age (FRA), the age at which you can claim 100% of your Social Security benefits, is continuing its gradual increase. For those born between May 2, 1958, and February 28, 1959, FRA will be reached in 2025.
- Born in 1958: FRA is 66 years and 8 months.
- Born in 1959: FRA is 66 years and 10 months.
For individuals born in 1960 or later, FRA will be set at 67 years.
Increased Taxable Maximum for High Earners
The SSA will raise the taxable earnings maximum from $168,600 in 2024 to $176,100 in 2025. This means higher earners will pay Social Security taxes on wages up to this new limit, potentially increasing their tax burden.
The tax rate of 6.2% for employees and employers will remain unchanged.
Higher Earnings Required for Work Credits
To qualify for Social Security benefits, you need 40 work credits. In 2025, the earnings required to earn one credit will rise from $1,730 to $1,810, meaning you’ll need at least $7,240 annually to earn the maximum of four credits per year.
Social Security Earnings Test
If you work while receiving Social Security benefits before reaching FRA, there’s a limit to how much you can earn without penalties. For 2025, the annual earnings limit will increase to $23,400.
Medicare Premiums and COLA Increase
- Medicare Premiums: Standard Medicare premiums will rise from $174 in 2024 to $185 in 2025, an increase of $11.
- COLA Increase: Social Security beneficiaries will see a 2.5% Cost-of-Living Adjustment (COLA), translating to an average increase of $49 per month for retirees and $38 per month for SSDI recipients.
Appointments Required for SSA Services
Starting January 6, 2025, most Social Security services will require an appointment, signaling a shift in how in-person assistance will be provided.
These updates reflect the SSA’s effort to adapt to inflation, workforce dynamics, and the needs of retirees. Beneficiaries and workers should review these changes to plan effectively for the coming year.
