Federal officials announced that Social Security recipients will increase their benefits by 2.5% this year, including other key changes to plans that affect retirement age, taxable income and public sector workers.
The Cost of Living Adjustment (COLA) came into effect in January, increasing the average monthly pension from $1,927 to $1,976. Growth is designed to help beneficiaries keep up with inflation, although some advocacy groups say such advocates have suffered short declines due to rising cost of living.
Other changes include an increase in the total retirement age (FRA) of people born in 1959 to 66,010 months, continuing to gradually transfer to people born in 1960 or later to the 67-year-old FRA. Retirees who delay requiring Social Security beyond their FRA can still receive higher monthly benefits by the age of 70.
“The social security adjustments in 2025 reflect our commitment to maintaining the long-term stability of the program while ensuring benefits remain fair and responding to the economic situation,” Acting Social Security Commissioner Kilolo Kijakazi said in a statement.
The repeal of the Light Elimination Regulations (WEP) and government pension offsets is a major policy shift that reduces the interests of millions of public sector workers, including teachers and law enforcement. The Social Security Fairness Act, signed into law in January, will restore all the interests of affected persons and include retrospective adjustments since 2024.
Workers who receive social security benefits before reaching full retirement age will also see changes in income limits. The cap is increased to $23,400, which means those earning more than that amount may see temporary benefits reductions. Meanwhile, the maximum taxable income threshold rose to $176,100, increasing the amount of income under Social Security Payroll Tax.
Additionally, qualifying for a better life experience account can help people with disabilities save and invest without jeopardizing federal benefits.
These adjustments are as policymakers continue to debate the long-term financial stability of social security, some lawmakers push for further reforms to address the projected funding shortage.
This article originally appeared on northjersey.com: Social Security Changes in 2025: What to Know from Quantity, Age
