You Have Less Than 4 Months to Prepare for These Major Social Security Changes

Key Points

• Social Security changes are coming in 2025.

• You need to prepare for full retirement age to move later.

• Retirees also need to be ready for a cost-of-living adjustment.

• The $23,760 Social Security bonus most retirees completely overlook ›

Seniors who rely on Social Security must be aware that the rules surrounding their benefits are changing. Current workers who are earning money and paying Social Security tax also must know certain rules, so they are not caught off guard.

A number of big changes are coming very soon that will impact both older and younger Americans. Those changes will be here in less than four months, so it would be a smart move to start preparing yourself for them now so you are ready when they arrive.

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Here's what they are.

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1. A later full retirement age for those turning 66 in 2026

One of the biggest issues in Social Security law is how full retirement age varies according to the year of your birth. This affects when exactly you can claim your benefits without facing a reduction in the amount that you collect.

Your standard Social Security benefit is based on average wages in the 35 years when your inflation-adjusted wages were at their highest. Unfortunately, your standard benefit is reduced if you claim benefits ahead of your FRA. Since you can claim benefits as young as 62 and potentially face years of cuts, there's the potential to shrink your standard benefit by as much as 30%.

If you don't want your benefits to shrink, you have to wait until at least FRA (or longer if you want to increase payments more by earning delayed retirement credits until age 70).

However, FRA is different in 2026 for those who have not yet turned 66.

For those turning 66 in 2025, FRA is 66 and 10 months. If you are not turning 66 until 2026 or later, though, FRA is 67. This is the latest possible full retirement age under current rules.

This means you will have to wait longer to start receiving benefits if you don't want them reduced.

As you do your retirement planning, keep your FRA in mind. You may need to rely more on your 401(k) or other retirement accounts a little longer to put off your claim and ensure you don't shrink your checks.

2. A cost-of-living adjustment

The next big change that is coming is a cost-of-living adjustment (COLA). COLAs take effect at the start of the year and result in retirees getting a larger check.

COLAs happen in most, but not all, years and are crucial to ensuring Social Security benefits do not lose buying power due to inflation. The COLA for next year is projected to be 2.7%, although retirees won't know the official numbers until October.

A 2.7% COLA would be higher than the benefit increase in 2025 but lower than the increase in the three prior years. Retirees need to be aware that their benefits bump may not be as big as they might have been expecting -- especially as COLAs haven't been keeping pace with the actual inflation seniors are experiencing due to problems with the formula used to calculate them.

COLAs are set based on third-quarter data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Since senior spending patterns tend to differ from the spending patterns of urban wage earners and clerical workers, inflation experienced by retirees is often not adequately measured with this method. This has caused benefits to lose buying power.

If your money doesn't stretch as far, you need to start planning for that next year -- especially as a good portion of the 2026 COLA is likely to be eaten up by rising Medicare premiums.

3. A change to the wage base limit

Finally, current workers also have to be prepared for a change coming next year. The wage base limit is likely to increase. The wage base limit is the maximum income on which you pay Social Security taxes.

In 2025, that limit is $176,100, but in 2026 it's expected to rise to $183,600. This means higher earners will now pay Social Security tax on $7,500 more of their income.

The new year will be here soon, and these changes will take effect before you know it, so start making your plans now so you are prepared and ready for what your financial future will look like after the new year.

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