Knowing the ins and outs of Social Security is complicated, especially for those who are not retirees and in the thick of it. The program changes and evolves every year and it can seem like a full time job to keep up with the news. The good part is that most of the changes do not affect retirees, but there are some that future beneficiaries will have to keep in mind in order to properly plan for retirement.

1. Social Security recipients will get bigger benefits

Even though retirees are what is called on fixed income, this does not mean that the income does not change. The name comes from the fact that when a person retires, their average indexed monthly earnings are calculated into a primary insurance amount which is fixed and is what future benefits increases are based on. There is no way to change the primary insurance amount once you turn 70 years old or stop working.

But there are annual increases to benefits courtesy of the cost of living adjustments (COLAs), which help retirees keep up with inflation. The 2025 COLA increase is 2,5% and benefits will be adjusted to reflect it.

2. The maximum benefit for retirees is increasing

Since Social Security is not a scalable system, there is a maximum benefit that is established every year. To get this benefit a retiree would have to:

• Earn the maximum taxable income for at least 35 years.
• Delay collecting benefits until age 70.

In 2024 the maximum benefit was $4,873 and the maximum taxable income was $168,600. These amounts have also increased along with the COLA, and so in 2025 the maximum monthly benefit will be $5,108 and the maximum taxable income will rise to $176,100.

Most people will not be able to get the maximum payment, but the closest you can get to it, the better for your future finances.

3. High earners will pay more in Social Security taxes

As we have explained, there is a maximum taxable income that workers have to pay to qualify for the maximum benefits, but this is also the maximum amount of earnings that gets taxed for Social Security. Anything earned below $176,100 in 2025 will be dully taxed, but anything above it will not count towards your Social Security benefits as the cap works both ways.

It has been suggested that this is an unfair system as those lower earners, who need the money the most, get taxed on all their income, while high earners that do not depend on the program get to have the maximum benefit plus more in savings. There have been several initiatives to correct this, but none of them have been passed.

4. The Social Security surplus is getting closer to running out

One of the reasons why removing the cap on Social Security taxes is such a popular measure is because the Trust Fund that supplements the program is running out of funds, and payroll taxes are not able to keep the program fully afloat.

Per the 2024 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance trust fund, “reserves will be depleted in 2035.” This means that there are ten years left to come up with a solution that will strengthen Social Security and will guarantee that 100% of benefits are paid after the depletion of the Trust. If nothing is done, retirees will receive a maximum of 83% of what they’re due.

There are measures being studied every day by lawmakers, and even though none of them have passed (some, like raising retirement age are deeply unpopular), Congress has made it a priority to be able to pay benefits past the Trust’s depletion date.

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