Learn more about the latest Social Security changes.
What to do if Social Security benefits are overpaid
Overpaid beneficiaries have 90 days to submit exemptions or repayment plans or cut benefits.
Social Security is undoubtedly a lifesaving financial lifeline for millions of Americans, but it’s far from the easiest program to keep up. This has been true since the start of monthly benefits in 1940, and there is no reason to believe it will change anytime soon.
Trying to respond to social security changes can go a long way to digest, but focusing on the most impactful and important things can help you maintain information without being overwhelmed. Moving later this year, here are four important changes.
1. Full retirement age has increased by 2 months
Your full retirement age (FRA) is known as the primary insurance amount (PIA) when you are eligible to receive your basic monthly social security benefits. Starting this year, the FRA is 66 years and 10 months for those born in 1959, and a two-month increase from those born in 1958.
This is noteworthy as your profits will decrease or increase depending on when you charge your profits against the FRA. If you claim benefits before your FRA, 1% of your monthly monthly 5/9 will be reduced to up to 36 months. After 36 months, benefits will decrease by 1% per month, 5/12.
For example, if your FRA claims benefits at 66 and 10 months, at 62 (earliest age to claim), your monthly profit will decrease by about 29.17%.
If you delay benefits beyond retirement age, you will see a 2/3rd increase of 1% per month (8% per year) until you reach the age of 70.
2. Some Social Security Beneficiaries receive tax credits
President Donald Trump’s “Big Beautiful Building,” which was recently signed into law, includes changes that will save taxes on retirees. The bill does not rule out federal social security taxes (despite some claims it is making), but it offers a temporary deduction to some people over the age of 65.
Until 2028, eligible people over the age of 65 will receive a $6,000 deduction, while married couples will receive a $12,000 deduction. To qualify for the full deduction, a single filer requires an adjusted gross income (MAGI) of less than $75,000, while a couple requires a MAGI of less than $150,000.
To qualify for a partial deduction, single filers need a MAGI of between $75,000 and $150,000, while couples need a MAGI of between $150,000 and $250,000. Those earning more than these limits are not eligible for the deduction.
Eligible individuals can claim a deduction whether they take the standard deduction or itemize the deduction. (This does not apply to most deductions.)
3. Some workers will pay more with Social Security Payroll Tax
To be eligible to receive Social Security, you must pay the Social Security system via Social Security Payroll Tax. The total tax is 12.4%, with employers and employees paying 6.2% each.
However, not all of your income is subject to this tax. Only up to a limit known as the “wage base limit.” Starting this year, wage standards limits have increased from $168,600 in 2024 to $176,100. This means that some people pay more taxes as the majority of their income is subject to taxation.
For example, if you made $175,000 in 2024, you would have been exempt from Social Security Tax. If you win the same amount this year, the entire $175,000 will be subject to tax.
4. Increased profit limits facing retirement benefits tests
You can work and earn as much as you want without any issues with your FRA. However, if you request benefits early, if you earn a certain amount, you will be exposed to the Social Security Retirement Revenue Test (RET).
For those who do not reach the FRA in 2025, the revenue limit has increased by $1,080 compared to 2024.
For those who reach the FRA this year, the limit will increase by $2,640 over 2024, and earn more, reducing benefits by $1 for every $3.
Thankfully, profit reductions will not be lost forever. Once you finally reach the FRA, Social Security will recalculate your profits in a way that gradually adds to your lifetime forbidden amounts.
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