Social Security is the nation’s largest social program, providing benefits to more than 70 million people. With a program that size, changes are inevitable. However, forecasting those changes is tricky because only Congress can enact them, noted Christine D. Moriarty, a certified financial planner (CFP) and owner of MoneyPeace, a financial wellness consultancy.
Moriarty and other financial planners recently shared their thoughts on prospective changes to the program with GOBankingRates.
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Cost-of-Living Adjustment
Beneficiaries look forward to cost-of-living adjustments each year. While a COLA is not guaranteed, it is likely, Krisstin Petersmarck, president and founder at New Horizon Retirement Solutions, told GOBankingRates.
The adjustment is based on the consumer price index, which measures inflation, for the third quarter of the year. It goes into effect for December payments, which recipients receive in January. The 2025 COLA was 2.5%. The 2026 COLA should be announced in October.
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Digital Social Security Cards
“In 2025, we can anticipate digital Social Security cards being introduced as an option versus the traditional paper card,” Petersmarck said.
According to the Social Security Administration, digital Social Security numbers will give Americans a secure and convenient way to display their SSNs and access their numbers if they forget them or lose their paper Social Security cards.
The SSA expects digital SSNs to be available early this summer.
ID To Apply For Benefits
“It is expected that individuals applying for Social Security benefits will need to show their ID to prove their identity to reduce fraud,” Petersmarck said.
Currently, people applying for retirement benefits online answer a series of questions to verify their identities.
Steps To Save Social Security
“People are worried about changes that might threaten their benefits, such as solutions to address trust fund depletion,” Petersmarck acknowledged, referring to the SSA’s estimate that the trust fund used to pay benefits is projected to be depleted in 2033. She expects Congress to address the funding issues within the next couple of years.
Mark Gelbman, a financial advisor and owner at Strategic Wealth Solutions, told GOBankingRates that Congress could pursue some common-sense solutions within that time frame.
“One option would be for Congress to remove the current tax limit on Social Security taxes. For 2025, any income above $176,100 is not taxed for Social Security.
“There have also been proposals to create a donut hole where, once you hit the income cap, you wouldn’t have to pay into the program again until you make more than $400,000. Every dollar earned over that amount would be taxable.”
Gelbman continued, “Congress could also look into raising the retirement age. Increasing the age of full retirement would result in Social Security having to pay less for each beneficiary.”
Moriarty is less optimistic about a forthcoming solution.
“If history is an indicator,” she said, “the dire program changes needed to protect [against] a decrease in benefits will happen at the ninth hour, not in the next year or two.”
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This article originally appeared on GOBankingRates.com: Financial Planners: 4 Changes We Anticipate for Social Security in 2025 and Beyond
