Social Security has been in the news a lot because of the program’s financial fragility and the potential for benefit cuts. And whenever there is an election, Social Security tends to be a big talking point for politicians.

For that reason, you may have accidentally overlooked some of the changes announced for Social Security in 2025. But here are three you need to know about, whether you’re retired and already collecting benefits or still in receipt. doing it. of your career.

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1. Benefits increase by 2.5%

Social Security will benefit from a cost of living adjustment in 2025. This is good news.

The bad news, however, is that the benefits only increase by 2.5% in January. This is well below the 3.2% increase obtained by beneficiaries at the start of 2024.

Unfortunately, the bad news doesn’t stop there. It was recently announced that Medicare Part B cost increases by $10.30 per month in 2025.

Without accounting for this, a 2.5% COLA results in an average increase of $49 per month for Social Security. But since many Social Security recipients are also enrolled Health insurancethis increase in Part B premiums will reduce that increase to approximately $39.

2. There is more leeway to earn money with a job while receiving benefits

There are some benefits to waiting full retirement age arrives to claim social security. If you were born in 1960 or later, this age is 67.

If you wait until full retirement age to receive benefits, you will not experience a reduction in your monthly payments. And you won’t be subject to an income cap either if you choose to stay employed.

But if you work and collect Social Security before reaching full retirement age, you may be denied some of your benefits if your income exceeds a certain threshold. In 2025, this threshold, known as the earnings test limit, is $23,400, up from $22,320.

However, what makes things a little more confusing is that there is a separate income limit for seniors who start the year without having reached full retirement age, but then reach full retirement age before the end of the calendar year. In this case, the income test ceiling is $62,160, compared to $59,520 in 2024.

3. High earners are looking at a bigger Social Security tax bill

Social security is financed mainly by social charges. And the more you earn, the more you pay, up to a point.

Social Security sets a salary ceiling each year which determines the amount of income taxed for financing purposes. In 2025, this ceiling is $176,100, compared to $168,600 in 2024.

The good news is that this change will not impact most American workers. But for the small percentage whose salaries are high enough to feel the difference, this is clearly an unwanted update to the program.

That said, if you’re unhappy about seeing your Social Security tax bill increase, remember that things could be worse. There may one day come a time when the Social Security wage cap is eliminated altogether, thereby subjecting all income to taxes to fund the program.

So for now, you might want to be grateful that you’re only looking at an additional $7,500 in wages subject to Social Security taxes. At the Social Security tax rate of 12.4%, that’s an extra $930 you’re looking at in 2025. And if you’re a wage earner, you can split that extra $930 in half with your employer, reducing the additional amount of money you lose.

Besides, think of it this way. The more you pay into Social Security, the higher your monthly benefit.

You may be saving well for retirement, but accidentally blow your nest egg and find yourself short of money. So the more guaranteed income you have in the form of a larger monthly benefit, the more protection you have.

It’s easy to forget details like these when much of the buzz around Social Security is about the possibility of benefit reductions. But it’s important to stay on top of changes in Social Security so you aren’t caught off guard.