For the past 90 years, Social Security has been a financial lifesaver for millions of retired Americans. Whether Social Security benefits account for a small portion, most, or all of their benefits, there's no denying its importance. That's the good part of Social Security.
The could-be-better part of Social Security is that the program can be difficult to digest and understand sometimes. There are constant changes, and if you're not actively following along, it's easy to miss some of these changes.
No worries, though; that's why we're here. As we're in the full swing of the back half of the year, here are three key Social Security changes to know.
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1. The full retirement age has increased by two months
Your full retirement age (FRA) is when you become eligible to receive your full monthly Social Security benefit, known as the primary insurance amount (PIA). Starting this year, the FRA is 66 years and 10 months for people born in 1959, a two-month increase from the FRA of people born in 1958.
Knowing your FRA is important because your benefits will either be decreased or increased, based on when you claim relative to your FRA. If you claim benefits before your FRA, the monthly amount will decrease by five-ninths of 1% for each month early, up to 36 months. Every additional month after 36 will further reduce benefits by five-twelfths of 1% monthly.
For example, if your FRA is 66 and 10 months, and you claim benefits at 62 (the earliest age at which you can claim), your monthly benefit will be reduced by roughly 29.17%; if you claimed at 64, it'd be reduced by roughly 18.9%.
Delaying benefits past your FRA will increase them by two-thirds of 1% each month (8% annually), until you turn 70. This gives someone whose FRA is 66 and 10 months a chance to increase their benefits by 25.3%.
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2. Some people will pay more in Social Security payroll taxes
To be eligible to receive Social Security, you (or your spouse if claiming spousal benefits) need to pay into the Social Security system via Social Security payroll taxes. The total tax is 12.4%, with employers and employees each paying 6.2%. If you're self-employed, you're responsible for the full 12.4%.
Not all of your income is subject to this tax, though -- only up to a limit, called the "wage base limit." This year, the wage base limit increased to $176,100, up from $168,600 in 2024. This means that some people will pay more in Social Security payroll taxes because a larger portion of their income is eligible for taxation.
For example, if you earned $176,000 in 2024, $7,400 of it would've been exempt from Social Security taxes. If you earn $176,000 this year, every dollar would be subject to the tax.
The wage base limit changes in most years, so it's important to keep up with it to ensure you're aware of how much you could be paying in Social Security taxes.
3. You can earn more money this year while claiming benefits early
There are no limits to how much money you can earn if you claim Social Security at your FRA or later. However, if you claim benefits before your FRA, earning over a certain amount will subject you to Social Security's retirement earnings test (RET).
For those who won't reach their FRA in 2025, the earnings limit increased to $23,400, up from $22,320 in 2024. Earning more than that will reduce your annual benefits by $1 for every $2 earned over.
If you reach your FRA this year, the limit is $62,160, up from $59,520 in 2024. Earning more than that will reduce benefits by $1 for every $3 over.
The good news is that reduced benefits aren't permanently lost. Once you reach FRA, Social Security recalculates your benefits in a way that gradually adds back the withheld amount over your lifetime.
