Social Security is a complicated program, made much more difficult for users by yearly updates and tweaks intended to keep the program current. These changes are key for beneficiaries, and comprehending them may have a substantial impact on their financial planning year after year, so being informed is essential.
The most well-known reform is the yearly cost-of-living adjustments (COLA) that benefits recipients get to maintain their spending power. However, there are additional changes that impact workers and retirees that are not as visible or widely discussed as the 2.5% COLA that will be applied to benefits in 2025.
1. Social Security’s full retirement age (FRA) is increasing in 2025
The earliest retirement age is 62 years old, although those who retire at that age do not receive their primary insurance amount (PIA), also known as the baseline benefit. The age at which a worker can receive the PIA is determined by their full retirement age, which is based on the year they were born.
| Birth Year | Full Retirement Age (FRA) |
| 1943-1954 | 66 |
| 1955 | 66 and 2 months |
| 1956 | 66 and 4 months |
| 1957 | 66 and 6 months |
| 1958 | 66 and 8 months |
| 1959 | 66 and 10 months |
| 1960 and later | 67 |
For many years, a worker’s retirement age has fluctuated. The full retirement age was originally set at 64 when the program was established in 1935, but when the 1980s brought a Social Security problem, one of the precautionary measures was to raise the retirement age to 67 years old.
This process took time and was executed gradually, resulting in anyone born after 1960 being eligible to retire at age 67 with full benefits.
Workers can still choose to retire early at age 62, but they would get a 30% reduction in benefits compared to what their PIA would have been if they had reached full retirement age.
To get the maximum amount of benefits, a worker must have paid payroll taxes to the Social Security Administration for 35 years and retire after reaching their full retirement age. Only this will ensure that they receive 100% of their PIA.
However, some workers can receive an additional amount that is higher than the PIA: if a worker chooses to retire at age 70, which is the age at which the maximum amount in benefits can be awarded, 8% every year after full retirement age, for a total of 24% for those who retire at age 67.
2. Social Security’s maximum retired-worker benefit is increasing in 2025
Social Security payments are limited. Because the system is not infinitely scalable, a former employee may only get a limited amount of perks. This ceiling rises yearly in accordance with the COLA, ensuring that benefits keep up with inflation.
To get the full Social Security payout, a person must have worked for 35 years or more with the maximum amount of taxable income and apply at the age of 70.
These conditions are difficult to meet for most workers, thus it is critical to evaluate the maximum benefit amounts at several common claiming ages to assess if it is profitable to wait as long as possible to claim. Because the standards are so tough to achieve, just around 7% of workers reach the level each year.
| Claim Age | Maximum Social Security Benefit |
| 62 | $2,831 |
| 65 | $3,374 |
| 66 | $3,795 |
| 67 | $4,043 |
| 70 | $5,108 |
Also See:- U.S. retirees to get a new payment of $1,927 from Social Security today, or in 7 days
