If you're one of the millions of older Americans who are collecting Social Security, then it's important to pay attention to changes that are coming to the program in 2025. But here's a news flash -- even if you're decades away from being eligible for benefits, it still pays to read up on the ways Social Security is changing in the new year.
The Social Security Administration commonly announces key changes to the program in October that are set to take place a few months later in January. This gives you an opportunity to adjust your financial plans as necessary.
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At this point, that big announcement is almost two months old, and January is only a month away. But it's not too late to read up on how Social Security is changing in 2025 -- and prepare accordingly. Here are four big updates you need to know about.
1. A 2.5% boost to benefits
Social Security benefits are eligible for an automatic cost-of-living adjustment (COLA) each year. The purpose of COLAs is to help seniors on Social Security maintain their buying power as living costs rise over time due to inflation.
In 2025, Social Security benefits are getting a 2.5% raise. That should bring the average monthly $1,927 benefit up to $1,976.
However, there's a bit of a catch there. The cost of Medicare Part B is also increasing in the new year, and the standard monthly premium will be about $10 higher. So seniors who are enrolled in Medicare while on Social Security will be left with a smaller increase to their monthly checks, since Part B premiums are paid out of Social Security automatically.
2. A higher earnings-test limit
Working in retirement is a great way to generate extra income and keep busy. So if you don't need a job for financial reasons, you may want to find one for social reasons, or to have a reason to leave the house.
You're allowed to earn money from a job while you're getting Social Security. And once you reach full retirement age, there's no need to worry about how much you're earning -- your paychecks from a job won't have an impact on the amount of money you get from Social Security at the time you're working.
Only if you haven't reached full retirement age is when you have to be mindful of Social Security's earnings-test limits. These limits dictate how much money you can get paid from a job before some of your benefits are withheld.
The good news is that the earnings-test limits are going up in 2025 from $22,320 to $23,400. From there, $1 in Social Security benefits will be withheld per $2 of earnings.