Recipients of Social Security will see an increase of 2.5% in their benefits this year, in addition to other important changes that influence retirement age, taxable income and employees in the public sector, federal officials announced.
The adjustment of the costs of living (cola) came into effect in January, which increased the average monthly pension benefit from $ 1,927 to $ 1,976. The increase is intended to help beneficiaries keep up with inflation, although some interest groups say that it is inadequate in the rising costs of living.
Other changes include an increase in the entire retirement age (FRA) to 66 years and 10 months for those born in 1959, thereby continuing the gradual shift to a FRA of 67 for those born in 1960 or later. Pensioners who postpone the claim of social security outside their FRA can still receive higher monthly benefits of up to 70 years.
“The adjustments to social security for 2025 reflect our dedication to maintaining the long -term stability of the program, while the benefits are fair and respond to the economic conditions,” said acting social security commissioner Kilolo Kijakazi in a statement.
An important policy shift came with the withdrawal of the windfall elimination (WEP) and the compensation of the government pension, which had reduced benefits for millions of employees in the public sector, including teachers and law enforcement officials. The Social Security Fairness Act, signed in January, restores full benefits for the affected and includes with retroactive effects from 2024.
Employees who receive social security benefits before they reach the entire retirement age will also see changes in the profit limits. The limit rose to $ 23,400, which means that those who earn above that amount can see temporary benefits reductions. In the meantime, the maximum taxable profit threshold rose to $ 176,100, which increased the amount of income subject to wage taxes on social security.
Moreover, it will be eligible for achieving better life experience accounts, which help people with disabilities save and invest without jeopardizing federal benefits, will be expanded in 2026. The qualifying age for a disability will increase from 26 to 46, which may benefit an estimated 6 million more Americans.
These adjustments come when policy makers continue to debate about financial stability in the long term of social security, whereby some legislators insist on further reforms to tackle projected financing deficits.
This article originally appeared on Northjersey.com: 2025 Social security Changes: what to know from amount, age
