Social Security News: Big changes are coming to Social Security in 2025 — and if you’re nearing retirement, this could directly impact your benefits. Here’s what you need to know about the rising retirement age, new policy proposals from Washington, and what it could mean for your future checks.
Full Retirement Age (FRA) Now Inches Closer to 67
Starting in November 2025, Americans born in 1959 will officially face a new full retirement age:
66 years and 10 months — an increase of two months from the previous year.
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Read More: Social Security Retirement Age Increases Again in 2025 — Here’s What Every American Needs to Know
This continues the gradual raise in retirement age triggered by a 1983 Congressional reform to address longer life expectancies and a dwindling Social Security trust fund. If you were born in:
- 1957 – Your FRA is 66 years, 6 months
- 1958 – Your FRA is 66 years, 8 months
- 1959 – Your FRA will be 66 years, 10 months (effective Nov 2025)
- 1960 or later – Your FRA will be 67 years
Claiming benefits before FRA (as early as age 62) will result in permanent reductions of up to 30%.
Why This Matters: Retiring Just One Month Early Can Lower Your Monthly Check
Many Americans are surprised to learn that even claiming one month before your FRA leads to lower lifetime payouts. And with the FRA nearly at 67, early retirees will face steeper cuts.
New Threats to Benefits: Will Social Security Be Cut by 23% in 2033?
According to the Congressional Budget Office (CBO):
- The Social Security trust fund is on track to be exhausted by 2034 (some estimates say 2033).
- If no action is taken, benefits could be slashed by 23% starting in 2035.
- The system is now operating in annual deficits, paying out more than it collects.
Washington Proposals: Eliminating Social Security Taxes — But At What Cost?
In a recent push, President Trump and several lawmakers proposed ending federal income taxes on Social Security benefits, which sounds like good news for retirees. However:
- This would reduce one of the trust fund’s few revenue sources.
- The Social Security system is funded by:
- 91% – Payroll taxes
- 4% – Taxes on benefits
- 5% – Interest from trust fund assets
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Removing benefit taxes could accelerate the insolvency timeline, leading to earlier and deeper benefit cuts.
Record Numbers Now Claiming Social Security
With more Americans retiring than ever before — especially Baby Boomers — the number of people collecting Social Security is at an all-time high, putting unprecedented pressure on the system.
What Needs to Happen? Experts Suggest These Possible Fixes:
- Raise payroll taxes
- Increase the wage cap
- Gradually raise the retirement age further
- Invest a portion of the trust fund into index-based stock market funds
But so far, Congress has failed to act, and each year of inaction worsens the crisis.