Notices revealing the amount of 2025 Social Security benefit checks will soon be sent to beneficiaries.

• In 2025, changes to the cost-of-living adjustment and Medicare Part B premium rates will impact the size of Social Security beneficiaries' checks.
• In December, individuals will receive notice of their benefits both online and through the mail.

In 2025, over 72.5 million Americans will receive a 2.5% cost-of-living adjustment in their Social Security and Supplemental Security Income payments.

Beneficiaries will receive a notice detailing how their monthly checks will change before then.

The Social Security Administration will make notices available online and via mail for beneficiaries with My Social Security accounts in December.

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The agency will issue a one-page notice with precise dates, amounts, and deductions for new benefits this year.

Here are some of the changes to look for in 2025.

A new 2.5% cost-of-living adjustment

According to the Social Security Administration, retirement benefits will see an average increase of approximately $50 per month in 2025.

Due to the annual cost-of-living adjustment, all beneficiaries will receive a 2.5% benefit increase.

Since the pace of inflation has slowed down, the cost-of-living adjustment for 2025 will be the lowest since 2021. The Social Security Administration uses government inflation data to calculate the annual change.

In 2023, beneficiaries experienced the greatest growth in four decades with a COLA of 8.7%, and in 2022, benefits increased by 5.9%. However, the annual COLA began to decline in 2024, with a 3.2% adjustment.

Joe Elsasser, a certified financial planner and president of Covisum, stated that although price increases have moderated, it's not accurate to say that inflation has ended.

If the pace of inflation increases, the annual COLA may increase again, he stated.

Monthly Medicare Part B premiums to go up

Medicare Part B, which covers physician services, outpatient hospital services, and certain home health services and durable medical equipment, requires retirees to pay monthly premiums.

Medicare Part B premiums are typically deducted from Social Security checks, and beneficiaries can also request to have Medicare Advantage or Part D premiums deducted from their Social Security benefit payments, according to Mary Johnson, an independent Social Security and Medicare analyst.

In 2025, the monthly Part B premium will increase by $10.30, from $174.70 to $185.

In 2025, Medicare Part B beneficiaries will experience a $17 increase in their annual deductibles, which will rise to $257 from the current $240.

In 2025, Medicare Part B premiums will be determined based on a beneficiary's MAGI from two years prior. Specifically, those with less than or equal to $106,000 in MAGI in 2023 will pay the standard monthly premium, as will married couples with less than or equal to $212,000.

Individuals with higher incomes will have to pay more for their monthly premiums due to income-related adjustment amounts (IRMAA).

According to the Centers for Medicare and Medicaid Services, approximately 8% of Medicare Part B beneficiaries are impacted by income-related adjustments.

Income changes may prompt higher taxes

Beneficiaries of Social Security have the option to request withholding of federal taxes from their payments.

Consider adjusting withholdings if anticipating more benefits could be taxed, according to Jim Blair, vice president of Premier Social Security Consulting.

The taxation of Social Security benefits is based on a formula known as combined income, which adds up adjusted gross income, nontaxable interest, and half of the benefits. If a beneficiary's combined income is low enough, they may not pay any taxes on their benefits. However, up to 50% or 85% of their benefits may be subject to federal taxes if their combined income exceeds certain thresholds.

CFP Brian Vosberg, president of Vosberg Wealth Management in Glendora, California, stated that clients have experienced an increase in other income, resulting in more of their Social Security being taxed.

Beneficiaries of retirees who have $200,000 in money market accounts or certificates of deposit may be subject to a higher federal tax rate on their benefits due to the Federal Reserve's recent rate hikes, according to Vosberg.

Strategies such as buying an annuity that lets interest grow tax deferred or reducing income from other areas, such as IRA withdrawals, can help minimize the tax bite, Vosberg said.

Blair advises retirees to check if their incomes have significantly changed in the past few years. If so, their monthly Medicare Part B premium rate may no longer be accurate. Beneficiaries can inform the Social Security Administration of any life-changing events that affect their incomes and Medicare premiums by completing a Form SSA-44.