Social Security recipients in Arizona need to be aware of two more changes still to come this year.
In 2025, Social Security benefits rose 2.5% to keep up with cost of living adjustments. Along with this, the earnings test limit rose. As for negative impacts, there are upcoming changes to the wage cap and earning work credits.
In Arizona, 19.3% of the population, about 1.46 million, are above the age of 65, meaning they are eligible for Social Security benefits. The population of residents on Social Security may be higher or lower depending on things like people working later than the retirement age, 66 to 67, or people taking an early retirement starting the earliest at 62.
Here’s what is changing with Social Security this year and how Arizona recipients could be affected.
What to know about Social Security wage cap changes
Most of the revenue for Social Security comes from payroll taxes that everyone pays, and a wage cap is set each year to determine how much of a person’s income is subject to Social Security payroll taxes. The percent of earnings taxed is 6.2%, so if you earn enough, the cap for what you pay may be going up.
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Last year, the wage cap or the limit on taxable earnings sat at $168,600. In 2025, this increases to $176,100. This means that those earning more than $176,100 will pay no more than $10,918 in social security taxes in 2025 — about $465 more than they did last year.
In Arizona, the median household income was $76,872, according to the Census, meaning most won’t see an effect in their Social Security contributions.
Social Security is trying to avoid benefit cuts by adding more money to the draining budget. As the funds for Social Security are projected to be depleted by 2035, this may be a temporary change, or the wage cap may increase again to try and allow for more money to be fed into the program.
It’s expected that those receiving Social Security benefits in 2025 will have an increase of about $50 per month starting in January.
What to know about Social Security work credit changes
To qualify for Social Security from your own earnings, you’ll need to accumulate 40 lifetime work credits at a limit of four per year.
In 2025, what it takes to earn a work credit is changing. To earn a work credit in 2024, a person needed to earn $1,730. This year, the number has gone up to $1,810. A person has to make $7,240 to earn four credits in 2025, whereas in 2024, they only had to make $6,920.
This change is expected to affect those who work part-time or as full-time caregivers and parents.
