Social Security is going to change in 2025. With the new Trump administration, it is not clear how long the fund will last, and there will be more arguments about whether benefits will be cut or taxes will be raised.
Besides all of this, the full retirement age (FRA) is going to rise again this year. People who are currently working should make sure they know when they can start getting their full benefits.
How the FRA affects your retirement benefits
The FRA is a very important part of figuring out how much Social Security you will get when you retire. The FRA is the age at which you can start getting full benefits, with no cuts for retiring early. If you start getting benefits before your FRA, your monthly payments will go down for good. If you wait until after your FRA, your monthly payments will go up, at least until you turn 70.
The FRA is based on the year you were born, and it went up over time because of a law that Congress passed in 1983. For people born after 1938, the FRA went up from 65 to 66 because of this law.
For people born after 1960, the FRA is now 67. This change was made to help Social Security’s long-term financial problems, which came up because people were living longer and getting benefits for longer periods of time.
For people born in 1959, the FRA will go up to 66 years and 10 months in 2025. As of November 2025, if you are in this age group, you will be able to get all of your benefits.
People who get Social Security can choose to start getting benefits before they reach the full retirement age. Even though you can start claiming as early as age 62, your monthly payments will go down a lot. If your full retirement age (FRA) is 66, your benefit will go down by about 25%. If your FRA is 67, it will go down by about 30%.
New changes in 2025 for Social Security
After taking into account the new cost of living index, Social Security recipients will see their monthly payments rise by 2.5% this year. COLA makes sure that Social Security payments keep up with inflation and cost of living increases.
This change is necessary to keep your purchasing power, especially since the cost of living keeps going up. It also helps recipients, especially those on fixed incomes, deal with rising costs of things like food, housing, and medical care.
This year, there will be both the annual COLA increase and the start of the new Fairness Act. The new bill was just passed by the Senate in December 2024. The Fairness Act makes sure that nearly 3 million Social Security recipients can get their full payments.
For decades, two other pieces of legislation had been blocking them. The Fairness Act will only affect certain types of workers, like teachers, police officers, and firefighters.
Continued concern for the longevity of Social Security
More and more people are worried about the future of Social Security because it looks like it might not have enough money in the coming decades. The fund’s reserves are expected to run out by the middle of the 2030s, putting more pressure on policymakers to deal with this problem. But it is still not clear how the Trump administration in 2025 will handle the situation.
Several possible solutions have been looked at by previous administrations, such as raising the retirement age, raising payroll taxes, or cutting benefits, but no clear winner has been found. The COVID-19 pandemic is making the country’s economic problems worse.
The Trump administration will need to act quickly to protect the long-term viability of Social Security and make sure it continues to provide essential benefits for millions of Americans.