All Social Security recipients will see a 2.5% increase in their benefits next year due to a cost-of-living adjustment (COLA). This increase will apply to everyone, including those receiving spousal Social Security benefits.
However, an important expense for retirees is expected to rise in 2025. This might not completely offset the COLA, but it could reduce the amount of extra money you were expecting to have.
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Medicare Part B Premiums Are Increasing Next Year
In 2024, seniors on Medicare will pay a monthly premium of $174.70 for Part B coverage. Next year, this will increase to $185.00, which is a $10.30 rise. If you haven’t started claiming Social Security, you’ll need to pay this premium out of pocket, similar to private health insurance plans.
Once you start receiving Social Security benefits, your Part B premiums are typically deducted from your monthly checks. You can choose to pay manually instead, but it’s usually more convenient to have it automatically deducted so you don’t have to remember to pay it each month.
This means the amount you actually receive from Social Security will be less than your stated benefit. For instance, the average monthly Social Security benefit is expected to increase by $49 to $1,976 in 2025. However, with Medicare Part B premiums deducted, you’ll actually see only a $38.70 increase per month, leaving you with $1,791 for other expenses after the deduction.
Higher-income earners could see even larger deductions from their Social Security benefits because Medicare charges higher Part B premiums for those with incomes above certain thresholds, as shown in the table below.
Individual filers with modified adjusted gross income (MAGI):
Married couples filing jointly with modified adjusted gross income (MAGI):
2025 Medicare Part B Monthly Premium Amount
Greater than $106,000 and less than or equal to $133,000
Greater than $212,000 and less than or equal to $266,000
$259.00
Greater than $133,000 and less than or equal to $167,000
Greater than $266,000 and less than or equal to $334,000
$370.00
Greater than $167,000 and less than or equal to $200,000
Greater than $334,000 and less than or equal to $400,000
$480.90
Greater than $200,000 and less than $500,000
Greater than $400,000 and less than $750,000
$591.90
Greater than or equal to $500,000
Greater than or equal to $750,000
$628.90
Data source: Center for Medicare & Medicaid Services.
Individuals accustomed to paying higher Part B premiums due to their income may still need to adjust their budgets to accommodate the increased Medicare costs next year.
Start Planning for 2025
The increase in Medicare Part B premiums will directly affect your Social Security benefits, as it comes straight out of your checks. But this isn’t the only cost that will rise next year. Other Medicare expenses, such as Part A deductibles and copays and the Part B deductible, will also increase.
Additionally, everyday costs like food, housing, utilities, and transportation are also rising due to inflation. While price increases aren’t as steep as they were in past years, even small rises can significantly impact retirees, especially those without sufficient savings to supplement their Social Security income. This makes it essential to have a budget for 2025 to know how far your benefits will stretch and how much additional income you’ll need.
If you haven’t done so already, you should receive a personalized COLA notice from the Social Security Administration this month, detailing your exact 2025 benefit amount. You can also view this information in your Message Center if you have a my Social Security account.
Consider creating a plan to cover expenses that Social Security won’t cover next year. This may involve reducing spending or potentially taking on a part-time job to boost your income. If these options aren’t feasible, check if you qualify for other government benefits, such as Supplemental Security Income (SSI), to help you manage your expenses.
