3 Social Security Changes Retirees Need to Know About in 2025

Your wait for the Social Security cost-of-living adjustment (COLA) announcement is finally over, and you might already be looking ahead to 2026 and the changes it will bring to your benefits. But you don't want to forget about other key Social Security updates that happened earlier this year.

You could feel the effects of the following three changes well beyond 2025. If you want to keep your checks coming smoothly and avoid surprises at tax time, make sure you understand these new rules.

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1. Digital payments only

The Social Security Administration ended the delivery of paper Social Security checks on Sept. 30, 2025. Going forward, all Social Security payments will come via direct deposit or on a prepaid debit card.

The vast majority of people already receive benefits this way, but if you were still receiving physical checks, you have to elect a new payment method. The Social Security Administration should have already reached out to you with instructions on how to do this. It's important to respond as quickly as possible to avoid delays in your checks.

If you've recently changed your payment method, make sure to follow up on your expected payment date to make sure the money appears in your account or on your debit card as scheduled. If not, reach out to the Social Security Administration to figure out what went wrong.

2. Higher overpayment recovery rate

The Social Security Administration raised the overpayment recovery rate to 50%, up from 10% earlier this year. This means the government will withhold half of the checks of those who were accidentally overpaid if the beneficiaries aren't able to pay back the extra money in a lump sum. This can be really difficult for those who count on their Social Security benefits to cover the majority of their expenses.

Overpayments are rare, but if this happens to you, reach out to the Social Security Administration before you spend the extra cash. If it's confirmed as an overpayment, give back as much as you can.

If you've already spent the money and can't afford to lose half your checks, you can request a lower overpayment recovery rate or request that the government waive repayment altogether. It might do this if you can show that repayment would cause you financial hardship and that the overpayment happened through no fault of your own. In either case, you'll likely have to submit detailed documentation of your income, expenses, and assets so the Social Security Administration can make its ruling.

3. New senior deduction

President Trump's "big, beautiful bill" didn't actually eliminate Social Security benefit taxes. But its new senior deduction may temporarily ease the tax burden on beneficiaries 65 and older. The tax deduction essentially lets seniors subtract up to $6,000 ($12,000 for married couples) from their taxable income for the year. You can also stack it with the existing senior deduction and your standard deduction for your filing status.

The result is a lower provisional income, which is what the government looks at when determining how much Social Security benefit tax you owe. However, it's likely your provisional income will continue to rise over the coming years as inflation drives up costs and Social Security checks. This could lead to more benefit taxes in 2026 and beyond than you'll pay in 2025.

It's also worth noting that, as it stands now, the senior deduction in the "big, beautiful bill" only exists through the 2028 tax year. After that, it's scheduled to expire unless Congress renews it. This is something to keep an eye on as we get closer to this deadline.

If you have any questions about these changes or the 2026 COLA, it's best to contact the Social Security Administration directly. You can do this by phone or by making an appointment at your local Social Security office.

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