Although Social Security has been around for nearly a century, the program’s rules aren’t necessarily set in stone. In fact, in the coming year, Social Security will see many important changes.

And these changes won’t just affect retirees who already receive benefits. They could very well affect you even if you are far from retirement.

Here’s what’s happening in 2025 that you need to know.

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1. Social Security benefits increase by 2.5%

Each year, Social Security benefits are eligible for an automatic cost of living adjustment, or COLA. The purpose of COLAs is to help beneficiaries maintain their purchasing power as the cost of living increases due to inflation.

In 2025, Social Security benefits will increase by 2.5%. This is actually the smallest COLA to arrive in years.

However, the news is not all dark. Because inflation eases, seniors may find that what they lose in the form of a smaller increase in Social Security, they gain in the form of groceries, gas, utilities cheaper, and much more.

2. The Social Security income limit increases

Seniors receiving social security are allowed to take a job and earn an income from it. And once you’ve reached full retirement age (which is 67 if you were born in 1960 or later), you can earn any amount of income from a job without having any part of your monthly Social Security payments withheld.

But if you work and collect benefits before full retirement age, you’ll need to make sure your income doesn’t exceed full retirement age. income test limit this applies to you.

The general Social Security earnings test cap in 2025 is $23,400 (up from $22,320 in 2024). You will have $1 of Social Security withheld for every $2 you earn above this limit.

However, if you reach full retirement age at some point in 2025 but have not yet reached that age at the start of the year, then you benefit from a much higher earnings limit . In this case, it’s $62,160 (up from $59,520 in 2024). And you’ll then have $1 of Social Security withheld for every $3 you earn above that limit.

You should also know that withheld benefits are not lost forever. If you exceed the income test limit in 2025, your monthly checks will initially be lower. But once you reach full retirement age, your checks should grow as the withheld benefits are returned to you.

3. The Social Security salary ceiling increases

It is not obvious that you pay social security contributions on your entire salary. Each year, a salary cap is put in place which determines the amount of income taxed to finance the program.

In 2025, that cap is $176,100, up from $168,600 in 2024. So if you earn $200,000 a year, you won’t pay Social Security taxes on your last $23,900 of income.

This also means that people earning $176,100 in 2025 and those earning millions of dollars will have the same Social Security tax burden. Some lawmakers believe this is unfair and are seeking to change the salary cap, or even eliminate it altogether. But it’s not such a simple thing to do, since Social Security maximum monthly benefit is linked to a ceiling on taxable salaries.

4. Social Security work credits will have a higher income threshold

To be eligible for Social security as a retiree, you must accumulate 40 work credits over your lifetime, at a maximum of four credits per year. In 2025, a single work credit is worth $1,810, up from $1,730 in 2024. So if you want to get four work credits for the year, you’ll need to make sure your salary is at least $7,240 $.

This change will generally not impact people who work full time. But if you work part-time or are a gig worker, this is an important thing to consider.

You may be affected by one or more of these Social Security changes in 2025. That’s why it’s important to know about them in advance and adjust your financial plans if necessary.

For example, if you have a higher income, you may want to find ways to reduce your taxes to offset the higher amount of wages you will be taxed on for Social Security purposes. And if you’re retired, it’s helpful to know how much wiggle room you have to make money in the new year before your benefits are affected.