9 Ways Retirement Will Be Different in 2025

Here are nine things to know about your retirement money in the year to come.

Social Security’s cost-of-living adjustment (COLA) boosts benefits in 2025 by 2.5 percent. The average retiree will see a $49 increase in their monthly payments, from $1,927 to $1,976, according to the Social Security Administration (SSA). For the surviving spouse of a late beneficiary, the estimated average survivor benefit will increase by $44, from $1,788 to $1,832 a month.

2. Medicare costs

Another potential drag on the COLA’s effectiveness is rising Medicare premiums. For the second straight year, the base rate for Medicare Part B, which covers doctor visits and other outpatient treatment, is going up by 6 percent, from $174.70 a month to $185.

3. Retirement plan contributions

For an individual retirement account (IRA), the standard cap for the 2025 tax year is $7,000. But if you are 50 or older, you can make a catch-up contribution of up to $1,000, for a total of $8,000. The limits are the same as in 2024 — and if you haven’t yet maxed out your contribution for 2024, you still can; the deadline is April 15, 2025.

4. Super catch-up contributions

Under this provision, savers ages 60 through 63 can make bigger catch-up contributions than other 50-plus workers: up to $11,250 over the standard limit, for a total of $34,750.

5. RMD

People ages 73 and older must make annual minimum withdrawals from traditional IRAs and workplace retirement plans. Roth IRAs and workplace accounts are exempt from these required minimum distributions, or RMDs, as long as the original account owner is alive.

6. Standard tax deduction

And here are the standard deductions for taxpayers ages 65 and older:

Married filing jointly (if one or both spouses is 65-plus): $32,300 (up from $30,700 in 2023)

Single or married filing separately: $16,550 (up from $15,700)

Head of household: $23,850 (up from $22,650)

7. Full retirement age

Congress voted in 1983 to gradually raise the Social Security full retirement age (FRA) — the age when you become eligible to claim 100 percent of the retirement benefit calculated from your lifetime earnings — from 65 to 67. In recent years, it has been going up two months at a time, based on year of birth.

If you will reach FRA in a future year, the 2025 earnings limit is $23,400 (up from $22,320 in 2024). Social Security withholds $1 in benefits for every $2 in earnings above the cap.

If you will reach FRA in 2025, the income threshold is $62,160 (up from $59,250). The withholding in this case is less: $1 in benefits for every $3 in earnings above the limit.

9. Qualified charitable donations

The IRS allows people age 70½ and older to make a qualified charitable donation (QCD) directly from an IRA and exclude it from their taxable income. The ceiling for an eligible donation is going up, from $105,000 in the 2024 tax year to $108,000 in 2025.