Millions of Americans Will Get a Social Security Bump in April: 4 Best Ways To Use the Extra Funds
Written by
John Schmoll
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Amber Barkley
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Millions of Americans depend on Social Security for monthly income, and some may receive a pleasant surprise in their April checks. Thanks to the Social Security Fairness Act, which was passed on Jan. 5, 2025, qualifying individuals will receive additional funds beginning in April 2025.
Some increases may be relatively insignificant, but certain recipients may receive more than $1,000 monthly. Here are the four best ways to use the extra money.
Pay Down Credit Card Debt
Credit card debt is an unfortunate reality for many older Americans. Over half of people aged 50-64 have credit card debt, while 42% of those aged 65-74 and 35% of those over 75 carry balances, according to AARP.
High-interest debt makes it challenging to manage other financial responsibilities. The impact intensifies for Americans who rely on Social Security benefits for a bulk of their income. Using additional funds from monthly checks reduces interest and, eventually, eliminates debt. Eradicating debt is particularly important for retirees who may be more prone to unexpected medical expenses.
Pad Your Savings Account
A typical rule of thumb is to have at least three months of living expenses saved. Americans on Social Security may be wise to save more, as they’re often on a fixed income; only 59% of retirees have three months of emergency savings, according to the Employee Benefit Research Institute (EBRI).
Recipients should aim for at least six to nine months of living costs saved, if not more, according to AARP. This helps manage unplanned medical expenses and avoid liquidating investments to cover costs. Using part of the Social Security pay bump to fund a high-yield savings account is a good way to protect yourself in the event of a surprise expense.
Knock Down Your Mortgage
Paying down a mortgage with a low interest rate may not make sense for many Americans, especially if they can earn more money on the funds elsewhere. However, a growing number of older Americans are carrying mortgages.
There were nearly eight million Americans over 65 spending at least 30% of their income on mortgage payments, as of 2023, according to the Joint Center of Housing Studies of Harvard University. This can be problematic for people on a fixed income. For those receiving additional Social Security money, applying some of the excess to a mortgage could provide a measure of relief.
It’s best to attack high-interest debt first, but for Americans without credit card debt, paying off a mortgage can reduce monthly costs.
Invest In Dividend-Paying Stocks
For retirees in the enviable position of having no debt, applying a Social Security pay bump towards purchasing dividend-paying stocks may be a good idea. Dividend-paying stocks can provide an additional source of income when done wisely.
Moreover, despite overall market turmoil, some dividend-paying stocks have had substantial gains in 2025. For retirees wanting to create both an income stream and manage risk, using unplanned funds to purchase dividend-paying stocks can be an effective way to accomplish both.
If you need to learn more about whether you qualify or how much you can expect to receive, you can consult your account at ssa.gov or call the Social Security Administration at 1-800-772-1213.
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