Social Security Updates: Current Changes and Future Outlook

Social Security Takes Center Stage, Again

Social Security remains one of the most important and widely discussed topics in retirement planning, especially with a growing wave of retirees and recent developments surrounding the Old-Age, Survivors, & Disability Insurance Program under the One Big Beautiful Bill Act.¹

As conversations about benefits, claiming strategies, and the sustainability of the Social Security trust fund become more relevant, it’s essential to recognize who Social Security supports. It provides monthly income for retirees, disabled workers, and eligible family members, including spouses of retired or disabled workers, as well as surviving spouses and dependent children of deceased workers.² While Social Security is a crucial part of retirement income, it faces challenges due to financial strain on the trust fund.

How the System has Changed Over Time

Franklin D. Roosevelt signed the Social Security Bill into law in 1935 during drastically different times. Life expectancy was under 60, and the worker-to-retiree ratio was 160 to 1. Many retirees relied solely on Social Security as their primary source of income, and many people never lived to collect it at all. Today, the average life expectancy is 78-80 years, with a worker-to-retiree ratio of 2.7 to 1.³ Benefits now cover only about 40% of the average retiree’s income.²

How Benefits are Calculated

To qualify, individuals must have worked and paid into social security for at least 10 years.² Retirement benefits are calculated using your 35 highest-earning years, taking the average, and applying a formula to determine your Primary Insurance Amount. Generally, the Full Retirement Age (FRA) ranges for 66 to 67 depending on birth year., at which point one can receive 100% of their benefits. Claiming at 62 results in a 30% permanent reduction, while delaying until 70 yields a 24% increase if your Full Retirement Age (FRA) is 67.⁴

Working While Collecting Benefits

You can begin receiving Social Security benefits while still working.  Still, you may face an earnings limitation where, before your full retirement age, one dollar is withheld for every two dollars earned above $23,400⁴. In the year, you reach FRA, one dollar is withheld for every three dollars earned above $62,160 as of 2025, although these withheld benefits are added back over time at FRA.⁴

Paying Taxes on Benefits

Whether Social Security is taxed depends on provisional income, which includes half of your Social Security benefits plus other income.

 If the provisional income exceeds:

• $23,400 (single) or $32,000 (married, filing jointly), up to 50% of benefits may be taxable.⁵
• Above $34,000 (single) or $44,000 (married, filing jointly), up to 85% may be taxable.⁴

What Changes Are Coming Along with the OBBBA

The One Big Beautiful Bill Act promised that nearly 90% of retirees would not pay tax on Social Security benefits:

• Enhanced deduction of $6,000 (single) or $12,000 (married, filing jointly), regardless of whether benefits are taken or not .
• Deduction phases out for Modified Adjusted Gross Income over $75,000 (single) or $150,000 (married, filing jointly).¹

As a result, the trust fund’s depletion projection date has moved from 2034 to 2032. Future beneficiaries may only receive about 76% of their benefits afterward.⁶ 

What Actions Can Be Taken

Some reforms can be made to maintain the trust fund, and these are just two of the most widely supported proposals aimed at strengthening the program’s long-term sustainability:

• Raising the wage base. More earnings would be subject to payroll tax, resulting in increased revenue.
• Increasing the FRA encourages workers to delay claiming benefits, easing pressure on the system.

Social Security remains a vital part of retirement income but faces challenges as more people retire and live longer. Benefits are unlikely to disappear, but without reform, future retirees could see reduced benefits. Planning may help maximize benefits and provide a more secure retirement. Contact us to learn how we can assist you with your planning needs.

Sources:

1. Internal Revenue Service. One, Big, Beautiful Bill Act: Tax Deductions for Working Americans and Seniors. July 14, 2025. https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors

2. Premier Social Security Consulting, LLC. NSSA® Certification Course Presentation Material. 2025.

3. Social Security Administration. Fast Facts & Figures About Social Security, 2025. September 2025. https://www.ssa.gov/policy/docs/chartbooks/fast_facts/index.html

4.  Social Security Professionals, LLC. NSSA® Reference Sheet. 2025. https://www.nssapros.com/downloads/nssa-advisor-quick-reference-sheet-2025-pdf-download

5.  Epic Capital. 2025 Annual Limits for Financial Planning. 2025. https://epiccapital.com/2025-annual-limits-for-financial-planning

6. Committee for a Responsible Federal Budget. As Social Security Turns 90, It’s Racing Towards Insolvency. August 14, 2025. https://www.crfb.org/blogs/social-security-turns-90-its-racing-towards-insolvency