Next year, all Social Security beneficiaries will see a 2.5% cost-of-living adjustment (COLA), and although this adjustment is clear on paper, it will bring an increase in monthly benefits for everyone, including those receiving spousal Social Security benefits. Yet, there’s a twist: a significant cost for retirees is set to rise in 2025. While this increase won’t completely offset your COLA, it might leave you with less extra money than you had hoped.
For Medicare seniors, brace yourselves for a rise in Part B premiums next year. In 2024, the monthly premium is set at $174.70, but come next year, it jumps to $185.00 – that’s a $10.30 increase. Those not yet drawing Social Security have to pay this premium out of pocket, just like any private health insurance expense.
As soon as you begin receiving Social Security, your Part B premiums are usually deducted straight from your monthly benefit checks. You can choose to opt out of this and pay the premium separately, but for many, it’s simpler to have it automatically deducted to avoid missing a payment. This deduction means your actual Social Security take-home will be less than your total monthly benefit. For instance, while the average Social Security benefit is poised to increase by $49 to reach $1,976 in 2025, if you have Medicare Part B payments deducted, your effective increase will be $38.70 per month, potentially leaving only $1,791 for other expenses after withholdings.
Higher earners, take note: Those with incomes above certain thresholds get hit with even heftier Part B premiums, as shown in the table below.
|Individual Filers (MAGI) | Married Filers Jointly (MAGI) | 2025 Medicare Part B Monthly Premium |
|————————-|——————————-|————————————-|
| >$106,000 to ≤$133,000 | >$212,000 to ≤$266,000 | $259.00 |
| >$133,000 to ≤$167,000 | >$266,000 to ≤$334,000 | $370.00 |
| >$167,000 to ≤$200,000 | >$334,000 to ≤$400,000 | $480.90 |
| >$200,000 to <$500,000 | >$400,000 to <$750,000 | $591.90 |
| ≥$500,000 | ≥$750,000 | $628.90 |
Data source: Center for Medicare & Medicaid Services.
Those accustomed to higher Part B premiums due to their income levels will want to revisit their budgets to accommodate the increase in Medicare costs for next year.
It's time to plan for 2025. The rising Medicare Part B premiums directly affect your Social Security checks, but that’s not all that’s increasing. Costs for other parts of Medicare, such as the Part A deductibles and copays and the Part B deductible, are on the rise too.
Don’t forget daily living costs are climbing as well—think about food, housing, utilities, and transportation. While the prices of goods aren’t skyrocketing as they once did, even minor hikes can burden retirees, especially if they lack enough savings to enhance their Social Security. Create a budget for 2025 so you’ll know exactly how far your monthly income stretches, and determine what needs supplementing through other income sources.
If you haven’t received it yet, expect a personalized COLA notice from the Social Security Administration this month, detailing your exact 2025 benefits. You can also check this in your Message Center if you have a my Social Security account.
Consider strategizing on how to cover the gap if Social Security doesn’t meet all your needs next year. You might need to cut some expenses or look for part-time work to boost your income. If that’s not a viable option, see if you qualify for additional government assistance like Supplemental Security Income (SSI) to help make ends meet.
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