Four Changes to Social Security Rules Implemented This Year

New Social Security Legislation: The Social Security Fairness Act, effective January 5, 2025, abolishes the Windfall Elimination Provision and Government Pension Offset, potentially increasing benefits for many, including teachers and first responders.

Financial Adjustments for Recipients: In 2025, the maximum taxable earnings for Social Security increased to $176,100, and recipients received a 2.5% cost of living adjustment, with the average monthly benefit at $1,976.

Tax Benefits for Seniors: Under President Trump’s “One Big Beautiful Bill,” 90% of Social Security recipients are now exempt from taxes on their benefits, and seniors aged 65 and older can claim an additional $6,000 tax deduction, effective from 2025 to 2028.

Importance of Social Security: Social Security benefits account for about 31% of income for those over 65, making adjustments like COLA crucial for helping seniors manage inflation.