By Ben Kesslen
Retiring at 65 is increasingly a thing of the past — especially if you want to get your full Social Security benefits.
Starting in 2025, pre-scheduled changes to Social Security’s full retirement age will go into effect, pushing back when people born in 1959 can hang up their cleats.
There are a slew of other changes coming to Social Security in 2025 as well. We broke down the changes below and outlined what you need to know:
Full Retirement Age (FRA) changes
FRA used to be 65 for everyone, but Congress made changes to retirement ages in the 1980s anticipating people living longer. The FRA has since been steadily increasing by two months based on people’s birth years. As a result, last year, people born in 1958 had to be 66 years and 8 months old to claim full benefits. And in 2025, those born in 1959 will have to be 66 years and 10 months old to claim full retirement benefits.
Cost of living changes
Social Security’s annual cost of living adjustment will be 2.5% next year, its smallest adjustment since 2021. The smaller adjustment comes as the government says inflation is cooling, but consumers are still grappling with high prices.
Taxable earnings increase
All workers pay into social security at a 6.2% tax rate that’s matched by employers. But that tax stops once you reach a certain income threshold. Last year, you only had to pay social security tax on the first $168,000 you made. In 2025, that will increase to $176,100.
New Social Security Administration commissioner
President-elect Donald Trump said earlier this month he had selected Frank Bisignano, chairman of Fiserv (FI+1.14%), to be the new commissioner of the Social Security Administration.
“Frank is a business leader, with a tremendous track record of transforming large corporations,” Trump said. “He will be responsible for delivering on the Agency’s commitment to the American People.”
Carolyn Colvin is currently serving as the acting commissioner of the agency until Trump is sworn into office.
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