Beginning in January 2025, Social Security retirement benefits have undergone several changes that will impact both current beneficiaries and those planning to retire in the coming years. These are necessary changes to ensure the sustainability of the Social Security system, whose funds could run out in less than a decade if legislators do not do something urgent about it.
These modifications cover adjustments in payments, Medicare premiums and the repeal of two provisions that affected the benefits of government workers, many of whom will see their monthly checks increase starting this year.
Repeal of WEP and GPO: justice for government workers receiving Social Security
In December 2024, Congress approved the repeal of the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), two provisions that have reduced Social Security benefits for millions of people for decades. The new legislation, called the Social Security Fairness Act, eliminates these policies that mainly affected state and local government employees, such as teachers, police officers and firefighters who did not contribute to Social Security in their public jobs.
The WEP, enacted in 1983, cut Social Security retirement benefits by up to half for those who also received a pension from employment not covered by the system. For its part, the GPO, introduced in 1977, reduced spousal or survivor benefits by up to two-thirds if the beneficiary received a government pension.
This repeal is retroactive and covers payments withheld by these provisions throughout 2024, meaning that the SSA should return a significant amount of money that was taken from you, if you are one of the benefited groups. The agency is currently evaluating the processes necessary to implement the law and has set up a page on its website to provide updates.
Cost of Living Adjustment (COLA): Lowest in Four Years
The Social Security Administration (SSA) announced a 2.5% cost of living adjustment (COLA) for 2025, reflecting more controlled inflation compared to previous years. This percentage is down from 3.2% in 2024 and the historic 8.7% in 2023. The average retirement benefit will increase by $49 per month, going from $1,927 to $1,946, which represents a more modest increase for beneficiaries.
This adjustment, although lower, is aligned with the historical COLA average, which since 2000 has been approximately 2.6%. The COLA applies to all Social Security payments, including survivor, family, and disability benefits, as well as Supplemental Security Income (SSI) payments. Furthermore, the maximum Social Security benefit, for those who qualify, is set to $5,108, for those who retired at age 70, and $4,043 per month for those who retired at their Full Retirement Age (FRA).
If you’re asking yourself what’s the FRA, it is the age at which you become eligible to receive your full, unreduced Social Security retirement benefits. This age varies depending on your birth year: 67 for those born in 1960 or later, gradually increasing from 66 to 67 for those born between 1943 and 1959, and 65 for those born before 1943.