How Rising Health Care Costs Could Put a Dent in Paychecks

Health Care Outpacing Pay

Wage growth in the U.S. has picked up the pace in the years since the pandemic (even if it may not have felt like that for all Americans between high prices and elevated interest rates). 

But even though inflation has come off of its highs, there’s a new challenge on the horizon for people’s paychecks: climbing health care costs.

Monitor Your Benefits

The cost of health care benefits is expected to increase 5.8% in 2025, according to preliminary data from consulting firm Mercer cited by the Wall Street Journal. Meanwhile, employers are generally planning on smaller merit-based pay bumps next year – 3.3% on average, per a separate study from the firm. 

Of course, these are percentages, so it’s hard to say how each and every paycheck may be affected exactly. But it’s nonetheless notable. The combination of higher health care costs and lower wage growth will eat into people’s take-home pay.

That means it’s especially important to monitor your benefits during this year’s open enrollment period. Ask for specifics regarding your company’s health care plan and lean on HR to fully understand how different plans can affect your finances.

Shifting Benefits Environment

Benefits are an important consideration for job hunters as well. Workplace perks help prospective employees evaluate the financial benefits of switching jobs, for example. If health care costs continue to rise, it could compel companies to rethink how they structure benefits and perks, in order to attract and retain top talent.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

Communication of SoFi Wealth LLC an SEC Registered Investment Advisor

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

SOSS24101701