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- 5 Smart Ways You Should Invest an Extra Social Security Check</p>
<p>Jordan RosenfeldSeptember 18, 2025 at 8:09 AM</p>
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<p>Vadym Pastukh / iStock.com</p>
<p>Throughout a calendar year, sometimes Social Security recipients may end up with an "extra" Social Security check in one month, possibly due to calendar adjustments or cost of living adjustment increases (COLA).</p>
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<p>If you receive one of these checks, and don't need it for immediate expenses, investing that money could help to grow it a little bit more. Experts recommended some smart ways to turn a Social Security Check into even more money.</p>
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<p>Open a Self-Directed IRA</p>
<p>For those eligible, a self-directed IRA can be a powerful option, according to Daniel Gleich, CEO and president of Madison Trust Company. "This retirement account allows you to diversify beyond standard Wall Street products such as stocks and bonds and into alternative assets like real estate, private lending, precious metals and more," he explained.</p>
<p>Of course, you'll need to keep adding money to it, or that one check won't be enough to see significant growth.</p>
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<p>Backfill Emergency Funds</p>
<p>Probably the smartest move is to add it to a high-yield savings account (HYSA) that's a little on the low side, according to Chad Cummings, a tax attorney and CPA and owner of Cummings & Cummings Law. That's because retirees with $2,500 or less in liquid emergency reserves are statistically more likely to withdraw from investments during downturns, locking in losses, Cummings explained.</p>
<p>"The extra Social Security check should first backfill cash reserves to cover three months of baseline expenses — usually $6,000 to $9,000 — before any consideration of market exposure."</p>
<p>Gleich added that "pairing a high-yield savings account with an income generating investment may help provide a steadier stream of income. However, evaluating your risk tolerance and consulting with a qualified financial advisor is considered best practice before making any investment decisions."</p>
<p>Contribute To an HSA</p>
<p>If you're covered by a qualified high-deductible health plan and not enrolled in Medicare yet, you could add this money to a health savings account (HSA), according to Jordan Mangaliman, owner and advisor at Goldline Financial Services. This could be a good way to finance healthcare costs in an early retirement, before age 65, at which time most Americans are eligible for Medicare.</p>
<p>Pay Down High-Interest Debt</p>
<p>Another smart way to invest an extra Social Security check is to pay down any high-interest debt, Mangaliman said. With the average credit card interest rate hovering between 20% and 29%, he pointed out that "by paying down this debt first, you can save yourself hundreds or thousands of dollars."</p>
<p>Invest In Low-Risk Options</p>
<p>If you have a robust emergency fund and have paid down debts, Mangaliman suggested investing "in a balanced portfolio of stocks, bonds and ETFs that are reflective of your goals and risk tolerance."</p>
<p>Additionally, consider some low risk investing options, such as U.S. Treasuries, municipal bonds, money market accounts and fixed annuities, he added.</p>
<p>One Caveat: Avoid CDS</p>
<p>Though certificates of deposit (CDs) may seem like a low-risk opportunity, Cummings recommended against them if only putting such a small amount in. He explained that a one-year CD at 4.50% annual percentage yield (APY), with monthly compounding, nets approximately 4.59%, but after the 22% federal tax, that net yield drops to 3.58%, which he said is well below the 12-month trailing consumer price index for all urban consumers of 3.7%, an inflation measure.</p>
<p>"This creates a negative real return, meaning every $1,000 invested loses purchasing power" due to inflation's erosion of value, Cummings said.</p>
<p>Ultimately, when receiving an extra Social Security check, retirees generally should look at the full financial picture, Gleich said. It always helps to get the advice of a financial planner, as well.</p>
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<p>This article originally appeared on GOBankingRates.com: 5 Smart Ways You Should Invest an Extra Social Security Check</p>
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