Millions of Americans rely on Social Security for their monthly income, and many will see an increase in their checks starting in April 2025. This is thanks to the Social Security Fairness Act, which was passed on January 5, 2025. While some increases may be small, some beneficiaries could receive over $1,000 more per month.
If you’re among those getting extra money, you might be wondering how to use it wisely. Here are four smart ways to make the most of this unexpected boost.
1. Pay Down Credit Card Debt
Many older Americans struggle with credit card debt. According to AARP:
- 50-64 years old: Over half have credit card debt.
- 65-74 years old: 42% carry a balance.
- 75+ years old: 35% still owe money.
Credit card interest rates are often high, making it tough to manage other expenses. If you rely on Social Security for most of your income, using extra funds to pay off debt can help reduce interest payments and free up more money for daily needs.
Clearing debt is especially important for retirees who may face unexpected medical costs.
2. Build an Emergency Savings Fund
Experts suggest having at least three months’ worth of living expenses in savings. However, Social Security recipients should aim for even more since they’re on a fixed income.
- 59% of retirees have at least three months of emergency savings (Employee Benefit Research Institute).
- AARP recommends saving six to nine months’ worth of expenses.
A good option is to put the extra Social Security funds in a high-yield savings account. This ensures you’re financially prepared for any unexpected costs, like medical bills or home repairs, without dipping into investments.
3. Reduce Your Mortgage Payments
Many retirees still have a mortgage. In fact, as of 2023, nearly 8 million Americans over 65 spent at least 30% of their income on mortgage payments (Harvard University’s Joint Center of Housing Studies).
While it might not always make sense to pay down a low-interest mortgage, it can be a good strategy if:
✔️ You’ve already paid off high-interest debts.
✔️ You want to lower your monthly expenses.
✔️ You’re worried about covering mortgage costs on a fixed income.
For some, extra Social Security money can provide much-needed relief by reducing financial stress and making it easier to stay in their homes.
4. Invest in Dividend-Paying Stocks
If you’re fortunate enough to be debt-free, investing extra Social Security funds in dividend-paying stocks can be a smart move.
💰 Why? Dividend stocks generate passive income, providing regular payouts while also offering potential for growth.
Despite market ups and downs, some dividend stocks have performed exceptionally well in 2025. If managed wisely, this strategy can help increase your financial security while keeping risks in check.
Final Thoughts
With extra Social Security money arriving in April, it’s crucial to use it wisely. Whether you pay off debt, boost savings, lower housing costs, or invest, these strategies can help improve your financial stability.
If you’re unsure how much you’ll receive, check your account at ssa.gov or call the Social Security Administration at 1-800-772-1213.
FAQ’s
Who qualifies for the Social Security increase in April 2025?
The increase applies to eligible Social Security recipients under the Social Security Fairness Act. To check if you qualify, visit ssa.gov or call 1-800-772-1213.
How much extra money will I receive?
The amount varies. Some people may get a small increase, while others could see over $1,000 more per month. Your final amount depends on your earnings history and benefits calculation.