Let’s break down the major concerns, policy updates and strategies to ensure your financial security amid the uncertainties.

1. Will Social Security run out?

One of the biggest fears retirees have is that Social Security will simply run out of money. The truth? While the program faces funding challenges, it won’t disappear entirely.

The Social Security Trustees’ latest report suggests that the trust fund reserves could be depleted by 2034, a year earlier than previously estimated. If that happens, benefits wouldn’t vanish but could be reduced to about 80% of scheduled payments unless Congress steps in with reforms.

What does this mean for retirees in 2025? The program still has enough incoming payroll taxes to cover most benefits, but adjustments may be needed in the coming years.

2. Will there Be a cost-of-living adjustment (COLA) in 2025?

Each year, Social Security benefits adjust to keep up with inflation. In 2024, retirees saw a 3.2% cost-of-living adjustment, or COLA, significantly lower than the 8.7% increase in 2023.

For 2025, early projections suggest a COLA between 2.5% and 3.0%, depending on inflation trends. While any increase helps, retirees must prepare for more modest benefit boosts compared to the last few years.

Tip: Don’t rely solely on COLAs to maintain your purchasing power. Consider additional income sources, like annuities or part-time work, to offset rising living costs.

3. The impact of rising retirement ages

Legislation discussions continue around gradually increasing the Social Security retirement age. Some proposals suggest raising the full retirement age, or FRA, from 67 to 68 or 69 for younger workers.

For current retirees, this won’t affect existing benefits. However, those in their early 60s who haven’t claimed yet should watch for changes that could impact their future payouts.

Should you delay claiming? 

• Claiming before FRA results in a permanently reduced benefit.
• Waiting until 70 maximizes monthly payments, increasing benefits by 8% per year past FRA.

If you’re unsure when to claim, running different scenarios with a financial advisor can help optimize your benefits.

4. How rising interest rates affect Social Security planning

With interest rates remaining high in 2025, some retirees may be reconsidering their claiming strategies. Higher interest rates mean:

1. Better returns on savings — If you can earn 4-5% in a high-yield account, delaying Social Security could make more sense, as you’ll have alternative income sources.
2. Higher borrowing costs — If you have outstanding debt, rising rates could put pressure on your retirement budget, making it tempting to claim benefits earlier.

Tip: Weigh the trade-offs carefully. Locking in Social Security too early may reduce your lifetime benefits, but higher rates could make alternative strategies more attractive.

5. Social Security taxes: Will you owe more?

Many retirees are caught off guard when they realize their Social Security benefits can be taxed. If your income exceeds certain thresholds, up to 85% of your benefits may be taxable.

2025 Social Security tax brackets 

• Single filers: If income exceeds $25,000, up to 50% of benefits are taxable; above $34,000, up to 85% is taxable.
• Married filers: If income exceeds $32,000, up to 50% of benefits are taxable; above $44,000, up to 85% is taxable.

With Social Security COLAs and rising interest rates boosting retirees’ income, more people may be pushed into higher tax brackets in 2025.

How to minimize Social Security taxes: 

• Use Roth IRAs or annuities, which don’t count toward taxable income.
• Withdraw from taxable accounts before tapping Social Security.
• Consider spreading withdrawals over multiple years to avoid spikes in taxable income.

6. Medicare premium increases could eat into benefits

Medicare Part B premiums are deducted directly from Social Security payments. In 2024, the standard Part B premium rose to $174.70 per month, and further increases are expected in 2025.

For high-income retirees, Income-Related Monthly Adjustment Amounts, or IRMAA, could mean even higher Medicare costs. If your Modified Adjusted Gross Income, or MAGI, exceeds $103,000 (single) or $206,000 (married), expect surcharges on your Medicare premiums.

What can you do? 

• Keep an eye on income thresholds and adjust withdrawals accordingly.
• Consider Qualified Charitable Distributions, or QCDs, from IRAs to reduce MAGI.
• Plan Roth conversions strategically to lower future taxable income.

7. Future policy changes to watch

Congress continues debating potential Social Security reforms to keep the program solvent. Proposals include:

• Raising payroll taxes: Increasing the Social Security payroll tax from 6.2% to 7-8% is on the table.
• Lifting the taxable wage cap: In 2024, only income up to $168,600 is taxed for Social Security. This cap may be raised or eliminated for higher earners.
• Means-testing benefits: Some proposals suggest reducing benefits for retirees with higher income levels.

While none of these changes are official yet, retirees should stay informed and flexible with their planning.

A personal take on Social Security in 2025

Over the years, I’ve seen retirees make two big mistakes with Social Security: claiming too early without considering the long-term impact and underestimating taxes on benefits.

One client, a 62-year-old engineer, claimed early to cover everyday expenses, but later regretted it when higher medical costs kicked in. Another, a retired teacher, was shocked when her Social Security was taxed at 85% because she withdrew too much from her 401(k) in one year.

The lesson? Social Security isn’t a one-size-fits-all decision. Careful planning can prevent costly mistakes and maximize your lifetime benefits.

Final thoughts: How to secure your Social Security in 2025

1. Stay updated on potential policy changes and COLA adjustments.
2. Consider delaying benefits to maximize monthly payouts.
3. Plan for taxes — understand how withdrawals and additional income affect taxation.
4. Monitor Medicare premiums to avoid surprises.
5. Be flexible — your retirement plan should adapt as laws and economic conditions evolve.

Social Security will remain a critical piece of retirement planning, but relying on it alone isn’t enough. Diversifying your income streams, managing withdrawals strategically and staying informed will help ensure financial stability — no matter what 2025 brings.

Your future self will thank you for taking the time to plan today.

Lyle Boss, The REAL BOSS Financial, endorsed by Glenn Beck as the premier retirement advisor for Utah and the Mountain West states. Boss Financial, 955 Chambers St., Suite 250, Ogden, UT 84403. Telephone: 801-475-9400.