The First Social Security Benefit Checks of 2025: A 2.5% Increase Amid Inflation
The first Social Security benefit checks of 2025 have been released, featuring a 2.5% increase, the lowest annual cost-of-living adjustment since 2021. This translates to an average increase of about $50 per month for retirees, according to the Social Security Administration. While some retirees may feel that the increase is not enough to keep up with inflation, others are grateful for the raise.
The latest government inflation data shows that the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) was up 2.8% over the last 12 months as of December. Another measure of inflation, core inflation excluding food and energy, was also up 2.8% in December.
For retirees who would like to see bigger Social Security benefit checks, there are a couple of strategies they may consider trying. One option is to adjust their tax withholdings. Social Security beneficiaries may have up to 22% of their benefits withheld for taxes. By reducing how much is withheld, retirees can access their funds sooner, although they may owe money at tax time next year. Beneficiaries can adjust their tax withholdings by filing Form W-4V with the Social Security Administration.
Another option is to ask to have their Medicare premiums adjusted. Higher-income retirees pay more for Medicare Part B and Part D prescription drug plans due to an income-related monthly adjustment amount (IRMAA). If retirees have experienced a life-changing event that has reduced their income, they can apply to have their Medicare withholdings adjusted by completing Form SSA-44 and submitting it to the Social Security Administration.
