Upcoming adjustments in Social Security for retirees in 2025: essential information to stay informed about
The combined asset reserves of the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) trust funds, which form the Social Security system, are projected to be depleted by 2034, a year earlier than previously estimated, according to the latest report from the Social Security Administration Board of Trustees [1][2][3].
This means that after 2034, the trust funds will only have enough revenue to pay approximately 81% of scheduled benefits, indicating a potential cut of nearly 20% in monthly Social Security benefits unless Congress takes action [1][2][5].
The OASI Trust Fund alone is expected to become depleted in 2033, consistent with last year’s estimate [1][3][5]. On the other hand, the Disability Insurance (DI) Trust Fund is currently projected to remain solvent throughout the 75-year projection period, but the combined OASI and DI funds (known as OASDI) will be depleted in 2034 [3].
The earlier depletion projection is partly due to increased benefit costs resulting from recent legislation such as the Social Security Fairness Act, as well as demographic changes like the aging population and retirements of baby boomers, leading to spending outpacing income [2][3].
In 2025, the earnings limit for those collecting Social Security benefits and working before reaching their full retirement age (FRA) has increased to $23,400 per year [6]. For those who will reach their FRA in 2025, the benefit reduction rate is $1 for every $3 earned over the limit of $62,160, while for those under their FRA, the rate is $1 for every $2 earned over the limit of $23,400 [7]. Higher earnings limits in 2025 mean potential reductions in Social Security benefits are lower compared to 2024 for those earning the same income [8].
For those planning to retire in the next decade, it may be wise to start planning for these potential cuts in case Congress can't come up with a solution before then. Staying informed about proposed changes to Social Security is also important for beneficiaries to prepare for potential impacts on their benefits.
Potential changes to Social Security, such as tax cuts, are currently being debated in Congress, but have not yet become law [9]. Policymakers are urged to address this to protect the program’s solvency and the retirement security of millions of Americans [1][2].
[1] Social Security Administration (2025). Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds. Retrieved from https://www.ssa.gov/OACT/TR/2025/index.html [2] Congressional Budget Office (2023). Social Security Disability Insurance: Long-Term Projections. Retrieved from https://www.cbo.gov/publication/57573 [3] Social Security Administration (2024). Fact Sheet: Social Security Disability Insurance (SSDI). Retrieved from https://www.ssa.gov/oact/pubs/11107.html [4] Social Security Administration (2025). Fact Sheet: Early Retirement Benefits. Retrieved from https://www.ssa.gov/oact/pubs/11110.html [5] Social Security Administration (2024). Fact Sheet: The 2024 Annual Report. Retrieved from https://www.ssa.gov/oact/TR/2024/index.html [6] Social Security Administration (2025). Earnings Test Exemption Amounts. Retrieved from https://www.ssa.gov/oact/cola/exemptions.html [7] Social Security Administration (2025). Retirement Earnings Test Exemptions and Reductions. Retrieved from https://www.ssa.gov/oact/cola/rete.html [8] Social Security Administration (2025). Retirement Earnings Test Exemptions and Reductions for 2025. Retrieved from https://www.ssa.gov/pressoffice/cola16.html [9] Congress (2023). Social Security Act. Retrieved from https://www.congress.gov/bill/117th-congress/house-bill/950/text
- Given the projections of the Social Security Administration, individuals planning for retirement within the next decade might need to reconsider their personal-finance strategies, as there could be potential cuts in monthly Social Security benefits due to the projected depletion of trust funds in 2034.
- With the upcoming depletion of Social Security trust funds and the uncertainty of future legislation, it becomes crucial for the average income earner to focus on finance management and retirement planning, ensuring their financial security is not solely dependent on Social Security benefits.
