Social Security 2025: Paper checks ending, taxes increasing- 5 key changes retirees must know

Social Security affects millions of Americans, with over 70 million receiving payments in July, and the number continues to rise each month.Although the program is in need of major reforms, it frequently undergoes smaller adjustments. Some are set by law, while others can be made through executive orders, a power that US President Donald Trump has actively used in his first seven months back in office.Here are five upcoming Social Security changes that retirees should know about:

1. Paper checks end

Trump signed an executive order in March ending paper Social Security checks. The deadline for compliance is September 30, meaning October will mark the first month without paper checks.Recipients must now have a direct deposit set up with their bank or use a Direct Express card, a prepaid debit card for those without bank accounts.A Social Security spokesperson advised, as quoted by USA Today, “If you’re one of them, be sure to update your information with the Social Security office or online at my social security before the end of the month.”

2. Payments could be garnished

The department of education paused student loan collections in 2020 but resumed in May 2025. Temporary delays on garnishing Social Security payments are ending.The DOE said in June, “Please be aware that the department of education is delaying offsets of these monthly benefits for a couple of months and plans to resume sometime this summer.” Defaulting recipients may see up to 15% of their benefits garnished.

3. Higher taxes for some workers

Social Security is funded through payroll taxes, with workers paying 6.2% of earnings, matched by employers. High earners pay taxes only up to the maximum taxable income, which rises annually.For 2025, the maximum taxable earnings is $176,100, up from $168,600 in 2024. This means higher-income workers will pay more in Social Security taxes, boosting program revenue.

4. COLA raises benefits

Social Security benefits are protected against inflation via a cost-of-living adjustment (COLA). Recipients received a 2.5% increase in 2025, and analysts predict a 2.7% adjustment for the upcoming year, based on current data. The official number will be confirmed in mid-October.

5. Medicare costs likely to rise

Medicare Part B premiums are automatically deducted from Social Security benefits. Due to rising healthcare costs, 2026 premiums are estimated to reach $206.20 per month, up from $185 this year, an 11.5% increase.For recipients with lower Social Security payments, the “hold harmless” policy protects them from reductions due to higher Medicare premiums. However, most beneficiaries will still experience the impact of rising healthcare costs on their monthly payments.