The end of the calendar year is a good time to assess your financial situation and make a plan for the new year. And while it can be challenging to find time for number crunching when you're busy making holiday travel plans and wrapping gifts, it's an important thing to do nonetheless.
If you're on Social Security, you should know that benefits are getting a cost-of-living adjustment (COLA) for 2025. And that could impact your finances. So now's a good time to see what you may be looking at.
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Set yourself up for success
In 2025, Social Security benefits are increasing by 2.5%. So now's the time to see what that actually means for your finances in the new year.
One thing to keep in mind is that in 2025, the cost of Medicare Part B is rising from $174.70 per month to $185. If you're enrolled in Social Security and Medicare at the same time and therefore pay your Part B premiums out of your monthly benefits automatically, that extra $10.30 is going to reduce your 2025 COLA, leaving you with a smaller boost.
The good news is that the Social Security Administration (SSA) should be sending you a letter this month detailing how your monthly checks will be changing. You can also access that information online if you have an account at SSA.gov. So you should be able to see exactly how much of a boost you're getting.
From there, it's a matter of making sure you can manage financially based on the specific monthly benefit you're in line for. If you've been struggling to keep up with your living costs and you expect to be in the same boat in 2025 based on your upcoming Social Security COLA, then now's the time to come up with a game plan for the new year to help your situation improve.
Do you need to make changes for 2025?
It's not a good thing to feel like you're constantly behind on your bills, or just scraping by. Once you see what monthly Social Security check amount you're looking at for the new year, you can sit down and figure out what changes, if any, you need to make for 2025.
If money is uncomfortably tight, some options to consider include:
- Joining the gig economy for extra income.
- Renting out a room in your home.
- Downsizing to a smaller living space.
- Seeing if it's feasible to give up a car.
- Making changes to your Medicare coverage so your plan is cheaper.
If you're going to make that final change, though, don't delay. Medicare's open enrollment period ends on Dec. 7. So if you think you can save money with a new Medicare plan, the time to get moving is now.
It's in your best interest to start off the new year on solid financial ground. Take the time to see what your Social Security payments will look like, and then use that information to make a plan that gets you to a better place.
