Social Security is a complex program, made considerably more challenging for users by annual revisions and adjustments designed to keep the program current.
These changes are critical for beneficiaries, and understanding them can make a significant difference in their financial planning year after year, so being informed is crucial.
The most well-known change is the annual cost-of-living adjustments (COLA) that benefits receive to protect beneficiaries’ purchasing power. However, there are other changes that affect workers and retirees that are not as obvious or as talked about as the 2.5% COLA that will be applied to benefits in 2025.
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 main 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.
Social Security’s maximum retired-worker benefit will increase in 2025.
Social Security payouts are capped. Because the scheme is not indefinitely scalable, a former employee can only receive a certain number of benefits. This cap increases annually in tandem with the COLA, ensuring that benefits stay pace with inflation.
To receive the full Social Security payment, a person must have worked for 35 years with the maximum amount of taxable income or more and wait until age 70 to apply.
These standards are difficult to achieve for most workers, thus it is vital to compare the maximum sums of benefits at the several popular claiming ages to determine whether it is worthwhile to wait as long as possible to claim. Since the conditions are so difficult to accomplish, just about 7% of workers meet the threshold in any given year.
| Claim Age | Maximum Social Security Benefit |
| 62 | $2,831 |
| 65 | $3,374 |
| 66 | $3,795 |
| 67 | $4,043 |
| 70 | $5,108 |