In 2025, millions of Social Security recipients are set to see an average increase of $185 in their monthly benefits thanks to the annual Cost-of-Living Adjustment (COLA). At the same time, Medicare Part B premiums will also rise, impacting how much of the increase retirees will feel in their pockets. Here’s what you need to know about these changes.
Social Security Benefits Are Going Up
The $185 monthly boost is part of the 2025 COLA adjustment, which is designed to help Social Security payments keep up with inflation. This increase will bring the average monthly benefit to around $1,915, compared to $1,730 in 2024.
The adjustment takes effect in January 2025, and the exact amount will depend on individual benefit levels, which are calculated based on your earnings history and retirement age.
For many retirees, this increase offers some financial relief, especially as costs for food, housing, and utilities continue to climb.
Medicare Part B Premiums Are Also Rising
On the flip side, Medicare Part B premiums will increase in 2025. The standard premium, which covers outpatient care such as doctor visits and preventive services, will rise by $15 to $185.90 per month, up from $170.90 in 2024.
Higher-income beneficiaries will pay more, as Medicare premiums are adjusted based on income levels. Those in the highest income brackets could see significantly larger increases.
This rise in premiums is driven by higher healthcare costs, including the introduction of new medical technologies and an increased demand for services.
How Much Will You Gain?
Even with the Medicare premium increase, most Social Security recipients will still see a net gain in their monthly income. For example:
- Social Security increase: $185
- Medicare premium increase: $15
- Net monthly gain: $170
However, higher-income earners and those with additional healthcare expenses might notice less of an impact.
What Can You Do to Prepare?
- Review Your Benefits Statement: Social Security will send updated benefit statements in late 2024, showing exactly how much you’ll receive.
- Adjust Your Budget: Factor in both the increased Social Security benefits and higher Medicare premiums to manage your 2025 finances.
- Explore Assistance Programs: If you have a lower income, look into Medicare Savings Programs, which can help cover premiums and other healthcare costs.
These changes highlight the importance of planning. While the Social Security increase is meant to address inflation, rising healthcare costs can still impact your bottom line. Staying informed and budgeting accordingly will help you make the most of your benefits in 2025.
