Social Security recipients will see a 2.5% increase in their benefits this year, among other key changes to the program that affect retirement age, taxable earnings, and public sector workers, federal officials announced.
The cost-of-living adjustment (COLA) took effect in January, raising the average monthly retirement benefit from $1,927 to $1,976. The increase aims to help beneficiaries keep up with inflation, although some advocacy groups say it falls short amid rising living costs.
Other changes include an increase in the full retirement age (FRA) to 66 years and 10 months for those born in 1959, continuing the gradual shift toward an FRA of 67 for those born in 1960 or later. Retirees who delay claiming Social Security beyond their FRA can still receive higher monthly benefits up to age 70.
“The Social Security adjustments for 2025 reflect our commitment to maintaining the program’s long-term stability while ensuring benefits remain fair and responsive to economic conditions,” said acting Social Security Commissioner Kilolo Kijakazi in a statement.
A major policy shift came with the repeal of the Windfall Elimination Provision (WEP) and Government Pension Offset, which had reduced benefits for millions of public sector workers, including teachers and law enforcement officers. The Social Security Fairness Act, signed into law in January, restores full benefits to those affected and includes retroactive adjustments from 2024.
Workers who receive Social Security benefits before reaching full retirement age will also see changes to earnings limits. The cap increased to $23,400, meaning those who earn above that amount may see temporary benefit reductions. Meanwhile, the maximum taxable earnings threshold rose to $176,100, increasing the amount of income subject to Social Security payroll taxes.
Additionally, eligibility for Achieving a Better Life Experience accounts, which help people with disabilities save and invest without jeopardizing federal benefits, will expand in 2026. The qualifying age for disabilities will increase from 26 to 46, potentially benefiting an estimated 6 million more Americans.
These adjustments come as policymakers continue to debate the long-term financial stability of Social Security, with some lawmakers pushing for further reforms to address projected funding shortfalls.
This article originally appeared on NorthJersey.com: 2025 Social Security changes: What to know from amount, age
