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The idea behind life insurance — that it’s one way to help protect loved ones — is fairly simple. But navigating the sea of options and figuring out which policy to go with isn’t always so straightforward.

Below are tips for comparing life insurance policies and understanding the insurance buying process.

Choosing the Right Policy

Before you start reviewing different life insurance coverage options, it’s a good idea to first decide which type of policy you need. The following guidelines can come in handy.

Buying Term Life Insurance

Term life insurance offers protection for a specific time period, usually five, 10, 15, 20, 25, or 30 years. If you die during that time, your beneficiaries receive a cash benefit.

A term policy can be matched to a particular length of time when coverage is needed. For example, if your top priority is to provide enough income for your dependents to pay for college, then a 20-year policy may fit your needs. Or if you need a policy that will help your beneficiaries repay outstanding debts, maybe a 25-year policy would make more sense.

If your budget is limited, buying term life insurance may make more sense. These policies tend to be more affordable than permanent life insurance because they are statistically less likely to pay out than permanent life policies.

Typically, there are a couple of reasons a term policy expires: if the insured stops paying the premiums or if they live past the term of the policy. Renewal is possible, but terms and rates may vary based on the applicant’s health and age. (The renewal is typically in one-year increments, and the cost will likely be significantly more than the cost during the initial term.)

Insured people who wish to extend their policies may want to contact different providers to determine how continuing coverage after the end of their life insurance terms generally works.
If your financial needs change during the term of the life insurance policy, contact your insurer. Some may offer a convertible policy, which involves converting a term life policy to a permanent policy in exchange for higher premiums.

Buying Permanent Life Insurance

Permanent life insurance works a bit differently. For starters, it provides protection for the insured’s lifetime, as long as the premiums are paid.

Unlike term life, a permanent life insurance policy will pay a death benefit no matter when the insured passes away. It may also come with a savings component, which can grow on a tax-deferred basis and be used to borrow funds for a variety of reasons or pay premiums. Even if the insured has less than ideal credit, the funds can still be borrowed against. In that case, the death benefit is considered collateral for a loan. (Make sure to check with your insurance provider or other advisor before withdrawing money because taking cash out of the policy can cause it to collapse unless the death benefit or premiums are adjusted.)

In practice, this can mean that when the insured passes away before repaying what was borrowed against the policy, the life insurance company deducts what’s still owed from the beneficiary payout.

There are several other options for permanent life insurance, including:

•  Whole life insurance. This coverage provides foreseeable lifelong coverage, which includes a fixed premium and death benefit.

•  Universal life insurance. Universal life insurance provides flexible lifelong protection and several cash accumulation options.

•  Variable universal life insurance. This type of coverage offers flexible death benefits and several investment options for the cash accumulation component.

It’s important to note that permanent life insurance is typically more expensive than term life insurance. So, when you’re weighing out the options, the cost of the policy might be a crucial factor to calculate.

Recommended: Term vs. Whole Life Insurance

Calculating the Right Amount of Coverage

There are several different ways to calculate how much coverage is necessary. Some insurers and advisers recommend multiplying the insured’s salary by 10 or 15. While that can be an effective rule of thumb, be sure to account for all your beneficiaries’ anticipated needs. For instance, you might need a higher coverage amount if you have children and plan on helping them pay for college. On the other hand, if additional resources or assets are available to your beneficiaries at the time of your death, a lower coverage amount might make more sense.

Another option is to use an online life insurance calculator to estimate the cost of different levels of coverage. If you take this route, be sure to include all the debt that beneficiaries or an estate may be responsible for, including shared revolving debt.

Keep in mind that the amount of life insurance coverage you choose will impact the price of your monthly premiums.

Comparing Life Insurance Providers

Once you’ve determined the right type and amount of life insurance coverage you need, it’s time to gather life insurance quotes. Look for insurance companies with established financial histories, strong consumer ratings, and flexible product offerings. Several credit rating agencies look at insurance providers’ overall financial strength and their ability to meet existing insurance obligations (i.e., pay out the benefits).

But ratings aren’t a guarantee, so be sure to review ratings for all the companies you’re considering. For example, A+ and A++ are A.M. Best’s superior ratings. They denote companies that, according to the agency’s analyses, have shown an exceptional ability to meet their insurance obligations and have evidenced financial strength. (All 50 states, the District of Columbia, and Puerto Rico have programs to ensure that insurance proceeds are paid if an insurer becomes insolvent.)

Recommended: How to Buy Life Insurance in 9 Steps

Gathering Multiple Life Insurance Quotes

Some providers require you to complete a simple online application before you receive a quote. In order to provide an accurate quote, the insurance company may ask you to share some personal details, such as your age, location, gender, health, and desired coverage.

Since permanent life insurance policies tend to be more complex, it can be wise to consult with an agent who can help you compare the pros and cons of different types of policies.

Comparing Life Insurance Quotes

Here are some things to pay close attention to as you’re reviewing life insurance quotes and considering which policy meets your needs.

Cost

The cost of a policy is generally determined by underwriters employed by the life insurance provider. They look at numerous factors, including applicants’ age, health conditions, and medical history, to determine the risk of covering them.

While each provider may use similar methodologies, costs can vary depending on the amount of coverage they are willing to provide and the price paid by the insured.

Again, the value of the company and the services offered can also play a role in how much a policy may cost. So, while aiming to get the lowest monthly bill may seem like the right solution, it’s wise to evaluate whether that lower-priced option can provide the desired coverage over the life of the policy.

Customization

Since no two people have the same financial goals or coverage expectations, some insurers offer policies designed to match a given applicant’s specific needs.

For example, insurers may offer different riders or payment plan options to customize a policy to fit an individual’s goals. Insurers who offer more flexibility might be a better fit for some buyers.

Product Range

Buying life insurance from a company that offers a wide range of products is not only a convenient way to shop for insurance, but it may even help you save money. That’s because insurance companies sometimes offer discounts for bundling multiple insurance policies together, such as life, automobile, or rental insurance.

People shopping for life insurance can review the other products each insurance company offers to determine whether buying a bundled policy can save time, money, and the potential hassle of working with more than one provider.

Long-Term Cash Value Potential

Since permanent life insurance has a cash value component that can grow over time, it’s important to factor in this trait when you’re comparing each policy’s potential value. Although low-cost policies may seem an attractive option, they may not provide as much coverage over the life of the policy.

For buyers who prioritize cash value and dividend distribution, picking a life insurance policy that offers either or both of those features may be a good choice. But keep in mind: Policies with higher dividend payouts are, typically, more costly each month. Many policies have guaranteed rates of return depending on the investment options. However, the market will often outpace the guarantees in insurance policies, so consider your investment objectives and risk tolerance before getting a life insurance policy as an investment vehicle.

Using an Agent

While it’s possible to buy life insurance online, sometimes it’s wiser to contact an insurance agent. Because different life insurance products come with varying fine print details and complex terminology, an insurance agent could be helpful in guiding you through the key differences between policies and products. You can also ask them any lingering questions.

An agent who is well-versed in a product’s details can also explain important distinctions such as cost, coverage limits, and varying terms. It’s worth noting that many insurance agents are paid on commission. In most cases, you won’t pay more by going through an insurance agent. The commission is included in the quote and goes to the insurer if the policyholder buys a policy directly from an insurance company.

The Takeaway

Life insurance can be a good way to provide for your loved ones after you’ve died. There are different types of policies to consider. Term life insurance offers coverage for a specific period of time, and if you die during that time, your beneficiaries will receive a cash benefit. Permanent life insurance offers protection for the rest of the insured’s life and will pay beneficiaries a death benefit no matter when the insured dies. It often comes with a savings component that can grow on a tax-deferred basis and be used for a variety of purposes.

As you begin to research companies and gather quotes, take note of the cost, ability to customize, long-term cash potential, and range of products the insurer offers. An agent can help you make sense of your options and select the plan that’s right for you.

SoFi has partnered with Ladder to offer competitive term life insurance policies that are quick to set up and easy to understand. Apply in just minutes and get an instant decision. As your circumstances change, you can update or cancel your policy with no fees and no hassles.

FAQ

What are the main types of life insurance policies?

There are two primary types: term life insurance and permanent life insurance. Term policies provide coverage for a specific period (e.g., 10-30 years), while permanent policies offer lifelong coverage and often include a cash value component that can grow over time.

How do I choose between term and permanent life insurance?

It depends on your needs and budget. Term life insurance is usually more affordable and suited for temporary financial obligations (such as a mortgage or children’s education). Permanent life insurance is more expensive but provides lifelong coverage and may build savings value.

What factors should I compare when evaluating life insurance policies?

When comparing policies, consider cost (premiums), coverage amount, policy duration, flexibility, and cash value potential. It’s also helpful to review the insurer’s product range and any options for customization or bundling.

What is the cash value component in life insurance?

Some permanent life insurance policies include a cash value feature, which grows over time on a tax-deferred basis. Policyholders may be able to borrow against it or use it to pay premiums, though unpaid loans can reduce the final payout.

Should I use an insurance agent when comparing policies?

While you can shop online, an insurance agent can help explain differences in coverage, pricing, and terms across policies. They can also answer questions and guide you toward a policy that fits your needs.

Coverage and pricing is subject to eligibility and underwriting criteria.
Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers- for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products.
Ladder, SoFi and SoFi Agency are separate, independent entities and are not responsible for the financial condition, business, or legal obligations of the other, SoFi Technologies, Inc. (SoFi) and SoFi Insurance Agency, LLC (SoFi Agency) do not issue, underwrite insurance or pay claims under LadderlifeTM policies. SoFi is compensated by Ladder for each issued term life policy.
Ladder offers coverage to people who are between the ages of 20 and 60 as of their nearest birthday. Your current age plus the term length cannot exceed 70 years.
All services from Ladder Insurance Services, LLC are their own. Once you reach Ladder, SoFi is not involved and has no control over the products or services involved. The Ladder service is limited to documents and does not provide legal advice. Individual circumstances are unique and using documents provided is not a substitute for obtaining legal advice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOPRO-Q226-006

Life insurance terms can be confusing when you first come across them, so learning the language of life insurance can help when you’re thinking about or shopping for a policy.

You may know that for many people, life insurance is important to have, and perhaps you’ve started some initial research into life insurance policies.

Learning common life insurance definitions can help you make an informed decision when looking into coverage options.

Life Insurance Terms

Discover life insurance definitions, simplified.

Accidental Death Benefit

If a life insurance policy includes an accidental death benefit, the cause of death will be examined to determine whether the insured’s death meets the policy’s definition of accidental. This is often a rider, or additional benefit for an additional fee, attached to the policy. An example of an accidental death could be one caused by a car crash, a slip, or machinery.

Annuity

This is a contract in which the buyer deposits money with a life insurance company for investment on a tax-deferred basis. Annuities are designed to help protect the contract holder from the risk of outliving their income.

An annuity may include a death benefit that will pay the beneficiary a specified minimum amount.

Beneficiary

This is the person or entity designated to receive the death benefit from a life insurance policy or annuity contract.

Contestable Period

For up to two years, a life insurance company may deny payment of a claim to beneficiaries because of suicide or misrepresentation on an application — for example, if the insured was listed as a nonsmoker but smoked often and died of complications related to that.

Death Benefit

This term refers to the amount that will be paid to the beneficiary upon the death of the insured. The phrase “death benefit” is common life insurance terminology you’ll see in a life insurance policy.

Evidence of Insurability

In order for you to qualify for a particular policy at a particular price, companies have the right to ask for information about your health and lifestyle. An insurance company will use this information when deciding on approval and rate. If you’re overweight, a smoker, or have a history of health problems, your policy will likely cost more than someone without those issues.

Free Examination Period

Also known as the “free look period,” this is a 10- to 30-day window during which you can cancel your new policy without penalty and get a refund of premiums.

Group Life Insurance

This provides coverage to a group of people under one contract. Group contracts are often sold to businesses that want to provide life insurance for their employees. Group life insurance can also be sold to associations to cover their members.

Insured

This is the person whose life is insured by the policy. The insured may also be the policyholder.

Permanent Life Insurance

These kinds of policies can provide lifelong coverage and the opportunity to build cash value, which accumulates tax-deferred. Whole life and universal life insurance policies fall under this umbrella term. Permanent life insurance is more expensive and complicated than term life insurance.

Policy

This is the official, legal document that includes the terms of the policy owner’s insurance. The policy will name the insured, the policy owner, the death benefit, and the beneficiary.

Policyholder

This refers to the person who owns the life insurance policy. It can be the person who’s insured by the policy.

Premium

The payment the customer makes to the insurance company to pay for the policy is called the premium. It may be paid annually, semiannually, quarterly, or monthly.

Term Life Insurance

This type of life insurance offers coverage for a set number of years, or “term,” of the insured’s life, commonly 20 or 30 years. If the insured individual dies during the years of coverage, a death benefit will be paid to the beneficiaries. Term life insurance costs less than permanent life insurance.

Recommended: 8 Popular Types of Life Insurance for Any Age

Underwriting

Often viewed as a mysterious process, underwriting — a crucial part of the application process — is simply when factors are evaluated relating to the applicant’s current health, medical history, lifestyle habits, hobbies, occupation, and financial profile to determine eligibility for coverage as well as what the appropriate premiums should be.

Universal Life Insurance

With this kind of permanent life insurance, policyholders may be able to adjust their premium payments and death benefits. The cash value gains vary depending on the type of universal life insurance policy purchased.

Variable Life Insurance

With variable life, another type of permanent life insurance, the death benefit and the cash value fluctuate according to the investment performance of a separate account fund.

Earnings accumulate tax-deferred. Fees and expenses can reduce the portion of premiums that go toward the cash value.

Whole Life Insurance

Whole life is another type of permanent cash value insurance. The premiums, rate of return on cash value, and death benefit are fixed and guaranteed. The cash value component grows tax-deferred. Whole life tends to be more expensive than other types of permanent insurance.

Recommended: Term vs. Whole Life Insurance

The Takeaway

Life insurance can be an important way to protect your loved ones’ financial future in the event of your death. While its terms can be a mouthful, they don’t have to be confusing. Understanding the definitions of life insurance can help you put a plan in place to protect your family.

SoFi has partnered with Ladder to offer competitive term life insurance policies that are quick to set up and easy to understand. Apply in just minutes and get an instant decision. As your circumstances change, you can update or cancel your policy with no fees and no hassles.

FAQ

What is the difference between term and permanent life insurance?

Term life insurance provides coverage for a specific period (such as 20 or 30 years) and is usually more affordable. Permanent life insurance lasts a lifetime and can build cash value over time, but it tends to be more expensive and complex.

Who receives the payout from a life insurance policy?

The beneficiary is the person or entity you designate to receive the death benefit when you pass away. This payout is typically tax-advantaged and can help cover expenses such as funeral costs, debts, or ongoing living needs.

How do insurers decide your eligibility and premium?

Insurance companies use a process called underwriting to evaluate your health, lifestyle, and financial situation. Based on this assessment, they determine whether to approve your application and how much you’ll pay in premiums.

Photo credit: iStock/mapodile

Coverage and pricing is subject to eligibility and underwriting criteria.
Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers- for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products.
Ladder, SoFi and SoFi Agency are separate, independent entities and are not responsible for the financial condition, business, or legal obligations of the other, SoFi Technologies, Inc. (SoFi) and SoFi Insurance Agency, LLC (SoFi Agency) do not issue, underwrite insurance or pay claims under LadderlifeTM policies. SoFi is compensated by Ladder for each issued term life policy.
Ladder offers coverage to people who are between the ages of 20 and 60 as of their nearest birthday. Your current age plus the term length cannot exceed 70 years.
All services from Ladder Insurance Services, LLC are their own. Once you reach Ladder, SoFi is not involved and has no control over the products or services involved. The Ladder service is limited to documents and does not provide legal advice. Individual circumstances are unique and using documents provided is not a substitute for obtaining legal advice.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOPRO-Q226-002

If you’re wondering if it’s okay to use checks with an old address, the answer is yes — most of the time.

Having a checkbook with your old address isn’t so unusual these days. Checks can come in handy sometimes, but many of us don’t need to use them too often in this era of online electronic payments. Because of this, it’s easy to see how the address on checks might become outdated.

Can You Use a Personal Check With an Old Address?

It’s possible to use a personal check with an old address on it as long as it still has the correct routing and account numbers on it. If those numbers properly identify which bank and account the money should come from in order to pay a check, you’re good to go. However, it’s a good idea to let the bank know about a change of address to ensure it sends statements and other important information about the account to the correct location.

In addition, it can be helpful to let the check recipient know that the address on the check is old, just in case they need to send a receipt or any other correspondence regarding the payment via mail.

It’s a different story if you get a new bank account number or if the bank changes routing numbers. This can happen, for instance, if two banks merge. In this situation, it’s necessary to order new checks with the correct information on them.

It’s important to make sure a check’s routing number and account number are accurate. If someone knowingly writes a check for an account that’s already been closed, this is considered writing a bad check, which is a form of fraud. Because of this, it’s a good idea to confirm check details, including your address, are current and accurate whenever you move or switch banks or set up a new checking account.

Can You Use a Business Check With an Old Address?

It’s possible to use a business check that has an old address on it as long as the account number and routing number are accurate. The main difference between business checks and personal checks is that personal checks are drawn on personal accounts, and business checks are drawn on business accounts.

Can You Use a Personal Check With a Wrong Address?

It’s fair to wonder, is it really okay if my checks have the wrong address? Whether it’s a typo on the check or you moved, this situation definitely happens.

While writing a personal check with the wrong address on it isn’t ideal, it’s possible to use one. As mentioned earlier, as long as the routing number and account number for your checking account are accurate, the check can be cashed properly. However, as noted previously, you may want to inform the check recipient of your current correct address in case they need it. And, of course, if you open a new bank account, you’ll want to make sure that your address on the checks you order is correct.

Can You Use a Business Check With a Wrong Address?

Even if the address on a business check is not only outdated but wrong, it’s still possible to use it as long as the routing number and account number listed on the check remain accurate.

Most businesses will want to order new checks with the correct address on them to avoid confusion about where their business is located and where correspondence should be directed. But a business typically doesn’t need to worry if it has old checks left; they should still be fine to use.

Do Unwritten Checks Expire?

As long as an individual keeps their account open and the correct account number and routing number remain on a check, the check won’t expire. However, if someone closes a bank account, this means the checks associated with the account become unusable.

Another situation to be aware of is that bank routing numbers can change, especially when banks merge. So, it’s a good idea to confirm from time to time that a check’s information is up to date.

When Are Checks With an Old Address Unusable?

Checks with an old address on them only become unusable if the routing number or account number listed on the check are inaccurate. This causes problems because these numbers are used to verify that the check is good and identify the account from which the money needs to be withdrawn in order to process the check.

Ordering New and Correct Checks

If you need new checks for any reason, such as to update your address, these are the steps you’ll generally take to order new ones.

•   Log on to your online bank account. It’s usually possible to order checks online or via a mobile account dashboard.

•   Request a counter check. If you’re really in a rush and can’t wait for new checks to arrive in the mail, you can go to your local bank branch and purchase counter checks. These are temporary checks that will have your account information on them, and they typically cost $1 or $2 per check, though fees may vary.

•   Review terms and fees. All banks charge different fees to buy checks or a checkbook, so double-check how much doing so will cost.

Changing Your Address on Checks

If you need to change the address listed on the checks in your personal checkbook, order more checks via one of the methods previously mentioned. This can be done online or via your mobile banking app. You may also be able to order checks in person at your bank.

Do You Need to Write Your Address on a Check?

Checks typically have an address already printed on them. Therefore, it’s not necessary for the check writer to write it on the check themselves. However, some people may prefer that only their name appear on their checks. Maybe they know they’ll be moving soon, or perhaps they simply choose this for privacy and security reasons.

If you do need to write your address on a check that doesn’t have it — perhaps because the recipient, such as a merchant, requests it — it’s generally best to:

•   Use blue or black ink.

•   Print your new address under your name at the upper left-hand corner of the check.

•   See if the business or merchant wants your phone number as well. This is a fairly common request, so they can reach you if necessary.

Do Checks Need an Address?

Checks don’t need to have an address printed on them. However, if you choose to omit an address (say, because you know you’ll likely be moving soon), some businesses may hesitate to accept the check. They might ask for a form of ID or a phone number in case they need to contact you.

Alternatives to Personal Checks

If an individual doesn’t want to write a check for whatever reason, these are some alternative payment options.

Money Orders

It’s possible to buy a money order from the post office and other locations, including some big box stores and grocery stores. Money orders are a very quick form of payment. The U.S. Postal Service charges $2.55-$3.60, depending on the amount, and some stores charge no more than $1.00.

Cashier’s Checks

A cashier’s check, which usually costs a small fee, can be bought at the bank and is a check that’s guaranteed by the bank. It will usually require a visit to the bank to get one, though.

P2P Money Transfer Apps

P2P money transfer apps — such as Venmo — that allow users to instantly transfer cash electronically to an individual as long as they have enough money in their bank account can be a convenient option. These are often free to use, but they can involve a small fee (a percentage of the transaction) in certain situations, such as if you’re sending money via credit card. (Sometimes e-checks, or electronic checks, are a payment option for utilities and other accounts. While not a P2P app, they do allow for a seamless transfer of funds.)

The Takeaway

As long as the routing and account numbers on the check are accurate, it’s possible to use a check with an old, incorrect address on it. That said, it’s a good idea to order new checks with the correct address on them to help avoid confusion that the wrong address might cause with check recipients. Making sure all your details are correct can help make banking as simple as possible.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

Does it matter if the address on my check is wrong?

It’s possible to use a check with the wrong address on it. The key is to make sure that both the routing number and the account number are still accurate on the check before using it.

Can you cash a check with an incorrect address?

Yes. You can cash a check with the incorrect address on it as long as the routing and account numbers on the check are accurate.

Do checks need an address?

Checks commonly have an address on them, but it’s not a requirement. If you’re using a check without an address, the business or service you’re paying may require some additional ID or info from you.

Photo credit: iStock/MicroStockHub

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^Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 3/31/26. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
We do not charge any account, service, or maintenance fees for SoFi Checking and Savings. We do charge transaction fees for outgoing wire transfers, Instant Transfers, and global remittance transfers. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
*Awards or rankings from Forbes are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOBNK-Q126-112

The Internal Revenue Service (IRS) uses seven different tax brackets to determine how much you owe when married filing jointly or any other status. In the U.S., taxpayers are subject to a progressive tax system which means that as your income increases, so does your tax rate. Tax brackets determine which tax rate is assigned to each layer of income you have.

The IRS takes your filing status into account when establishing tax brackets, which is important for couples to know. What are the 2025 tax brackets for married filing jointly? Here’s what you need to know.

2025 Tax Brackets

If you’re wondering what tax bracket you’re in, that’s a good question to ask, especially if you’re filing taxes for the first time or your filing status has changed because you’ve gotten married.

Married filing jointly 2025 tax brackets correspond to seven federal income tax rates: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Income ranges used for 2025 tax brackets apply to returns filed in 2026.

What are the tax brackets for 2025 married filing jointly? The table below breaks it down.

2025 Tax Brackets

To find out what tax bracket you are in, check the following table. It illustrates 2025 federal tax brackets and tax rates, based on your filing status.

Recommended: How Much Do You Have to Make to File Taxes?

2026 Tax Brackets

While tax rates are the same for 2025 and 2026, the income ranges for each tax bracket are higher. Here’s a look at how 2026 tax brackets compare to 2025 tax brackets for married jointly filing and all other filing statuses. This information can be helpful as you track your finances.

How Federal Tax Brackets and Tax Rates Work

In the U.S., the tax code operates on a progressive system that takes into account your income and filing status to determine how much tax you’ll owe. In a progressive system, the highest-income earners are subject to the highest tax rates. This is based on a concept called ability to pay, which reasons that if you earn more, you can afford to pay more in taxes.

Federal tax brackets assign a tax rate to individual income ranges. There are seven tax rates and seven corresponding income ranges. Tax rates, which run from 10% to 37%, are the same for the 2025 and 2026 tax years and apply to these individual income tax filing statuses:

•   Single

•   Married filing jointly

•   Married filing separately

•   Head of household

•   Qualifying widow(er)

Tax rates may be the same from year to year, but income ranges can change. For instance, the tax brackets for 2024 married jointly filing are different from the tax brackets for 2025 married jointly.

If you look at the income ranges, you’ll see that they’re largely the same for most filing statuses. The exception is married couples filing jointly. Couples have higher income ranges since it’s assumed that both parties earn income.

Curious about what are the tax brackets for 2025 married filing jointly at the state level? It depends on where you live and file state income taxes.

Forty-one states and the District of Columbia assess an income tax. Fourteen states use a flat tax rate that applies to all income levels, while the remaining 27 and the District of Columbia use graduated tax rates assigned to different tax brackets.

Keep in mind that there are different types of taxes. Tax brackets and tax rates for individuals are not the same as tax rates for corporations.

Recommended: Credit Monitoring Tools

What Is a Marginal Tax Rate?

A marginal tax rate is the tax rate you pay on the highest dollar of taxable income you have. Your marginal tax rate doesn’t apply to all your income; just to the last dollar earned.

For example, say that you take a new job with a higher salary and move from the 22% to the 24% marginal tax rate. That doesn’t mean that your entire salary is now taxed at the 24% rate. Only the amount that goes over the income threshold into the 24% bracket would be assessed at that rate.

Marginal tax rates apply to all your taxable income for the year. Taxable income is any income you receive that isn’t legally exempt from tax, including:

•   Wages (pay that’s typically based on the hours worked)

•   Salaries (pay that’s typically a fixed amount that’s paid regularly)

•   Tips

•   Business income

•   Royalties

•   Fringe benefits

•   Self-employment earnings

•   Side hustle or gig work earnings

•   Interest on savings accounts

•   Profits from the sale of virtual currencies

You’ll also pay taxes on investment property if you own a rental unit. It’s important to accurately report to the IRS all income you and your spouse have for the year to avoid issues.

Underreporting and misrepresenting income are some of the biggest tax filing mistakes people make.

What Is an Effective Tax Rate?

Your effective tax rate is your average tax rate based on how your income is taxed in different brackets. It’s common for your effective tax rate to be lower than your marginal tax rate.

If you and your spouse file jointly with $250,000 in income (meaning you each earn more than the average salary in the U.S.), your marginal tax rate would be 24%. But your effective tax rate would be 17.5%. That assumes that you claim the standard deduction.

Standard deductions are amounts you can subtract from your taxable income. The standard deduction amount for married filing jointly in 2025 is $31,500.

Recommended: Online Budget Planner

How to Reduce Taxes Owed

Reducing your tax liability as a couple starts with understanding what kind of tax breaks you might qualify for. It can also involve some strategizing regarding your income.

•   Claim credits. Tax credits reduce your taxes owed on a dollar-for-dollar basis. So if you owe $500 in taxes you could use a $500 tax credit to reduce that to $0. Some of the most common tax credits for couples include the Child Tax Credit (CTC), the Child and Dependent Care Credit, and the Retirement Savers’ Credit.

•   Consider itemizing. Couples can claim the standard deduction, but you might itemize if you have significant deductible expenses. Some of the expenses you might deduct include mortgage interest if you own a home, student loan interest, and charitable contributions.

•   Open a spousal IRA. Individual retirement accounts (IRAs) let you save money for retirement on a tax-advantaged basis. Contributions to traditional IRAs are tax-deductible for most people. If you’re married but only one of you works, you could open a spousal IRA and make deductible contributions to it on behalf of your nonworking spouse.

•   Contribute to other retirement accounts. If you both work, you can still fund traditional IRAs for a tax deduction, or sock money into your 401(k) plans at work. Contributions to a 401(k) can reduce your taxable income for the year, which could help you owe less in taxes.

•   Check your withholding. Your withholding is the amount of money you tell your employer to hold back for taxes. Getting a refund can feel like a nice windfall, but that just means you’ve loaned the government your money for a year interest-free. You can adjust your withholding to pay the right amount of tax instead.

“It’s a good idea to check your pay stubs periodically to ensure that the deductions being taken out are accurate and align with your financial goals,” says Brian Walsh, CFP® and Head of Advice & Planning at SoFi. “To make sure the appropriate amount of taxes are being withheld from each paycheck, you may also want to revisit your W-4 annually and make any adjustments as your circumstances change.”

You may also defer year-end bonuses or other compensation until the beginning of the new year so you have less taxable income to report. As you start preparing for tax season, consider talking to a financial advisor or tax pro about the best strategies to minimize your taxes owed.

The Takeaway

Knowing how tax brackets work (and which one you’re in as a married couple filing jointly) can help you get your tax return completed accurately with fewer headaches. It also helps to keep a record of your deductible expenses throughout the year if you plan to itemize when you file. That’s something a money tracker can help with.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What is the standard deduction for married filing jointly in 2025?

The standard deduction for married couples filing jointly is $31,500 for the 2025 tax year. That amount increases to $32,200 for the 2026 tax year.

What are the federal tax brackets for married couples?

The federal tax brackets for married couples filing joint returns assign seven tax rates ranging from 10% to 37%. For tax year 2025, the lowest tax rate applies to the first $23,850 in income while the highest tax rate applies to income above $751,601.

Will tax refunds be bigger for 2025?

Many taxpayers may qualify for a larger refund on their 2025 return, due to inflation-related adjustments to the tax brackets and standard deduction amounts.

What is the tax offset for 2025?

Tax offsets occur when the federal government holds back part or all of your tax refund to satisfy a delinquent debt. Tax offsets can happen if you owe federal income taxes or federal student loan debts.

How will tax brackets change for 2025?

The 2025 tax brackets are subject to the same tax rates that applied in 2024 and will apply in 2026; the difference is the range of incomes subject to each tax rate. The IRS periodically adjusts tax brackets as well as standard deduction limits to account for inflation.

At what age is social security no longer taxed?

There is no minimum or maximum age at which Social Security benefits cannot be taxed. Whether you must pay tax on Social Security benefits depends on whether you have other taxable income to report for the year.

photo credit: PonyWang
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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Inflation’s effects have been especially obvious over the past couple of years, thanks to the soaring prices of groceries, gas, rent, and childcare. But even when inflation is low, it can have an impact on your finances.

“Inflation” means the same amount of money will pay for less in the future, and that change can happen quickly or slowly. Either way, unless your pay raises are keeping pace with the rising cost of living, you can expect your purchasing power to erode. To compensate, you may have to downsize your lifestyle or your long-term goals.

A salary inflation calculator is a specialized tool that can help you understand the impact inflation has on your paycheck, from year to year or over decades. Read on for more information on historic and current inflation rates, how to use an inflation calculator to assess your salary, and how to plan for what’s next.

What Is a Salary Inflation Calculator?

A salary inflation calculator can be used to illustrate the effect inflation has on your hard-earned money. It shows you how much buying power your salary (if unchanged) gained or lost from one year to the next. Or you can use it to gauge how well your salary has held up over a period of several years.

For example, you can enter how much you made in December 2023, and calculate how much more that salary would have to be in December 2024 to maintain the same purchasing power. (Although you might not want to know.) Or you can spread the dates out further, from 2014 to 2024.

There are several different versions of salary inflation calculators online. The U.S. Bureau of Labor Statistics (BLS) provides one that’s both reliable and easy to use here.

Historical Inflation Rates, Compared

To make its inflation calculations, the BLS uses the Consumer Price Index, which measures the overall change in consumer prices based on a representative basket of goods and services over time. The BLS began collecting spending data as early as 1888, and with a few tweaks over the years to update its process, continues to do so today.

The table below shows the annual rate of inflation from 1920 to present. The first column notes the year the data was collected; the second column represents the Consumer Price Index for All Urban Consumers (CPI-U) for that year; and the third column shows the annual percent change/annual rate of inflation.

How to Calculate Salary Adjusted for Inflation

Probably the easiest way to calculate your income’s buying power adjusted for inflation is to use an online inflation calculator. Simply enter the starting year of your choice, your salary in that year (before or after taxes), and the current year. Then the calculator will do the math for you.

For example, if you made $60,000 in December 2018 and you want to see the inflation-adjusted equivalent for December 2024, just plug in those numbers. The calculator will tell you the inflation-adjusted amount is $75,373.46.

What does that mean for you? In a perfect world, companies help valued employees combat inflation with appropriate annual pay increases. If you haven’t had a pay bump since 2018 and you’re ready to talk to your employer about a raise, you might mention that $70,881.69 is the minimum it would take to keep up with the increased cost of living. And if you’re in a field where employers are offering competitive pay and benefits to attract good candidates, you might be able to negotiate for even more.

Recommended: Salary vs. Hourly Pay

What Is Inflation and How Does It Work?

Inflation occurs when the cost of goods and services increases — not in just one or two categories, but across the economy — and consumers’ buying power decreases. As a result, it becomes necessary to earn more just to maintain the same standard of living.

You may wonder if inflation is good or bad. A mild to moderate inflation rate is considered healthy for the economy. It can encourage consumers to buy now rather than later if they expect prices could go higher. Factories may produce more to meet demand from stores that are selling more. Hiring and wages tend to go up. And more people may be motivated to invest their money to grow it for the future.

The Federal Reserve’s target inflation rate is 2% over the long term, and the U.S. hadn’t strayed far from that so-called “sweet spot” for decades — until recently. A number of factors can cause inflation to increase to an uncomfortable level, and thanks to a pandemic-related perfect storm (supply chain issues, stimulus payments, soaring gas prices, and an employment rollercoaster), that’s where America landed a few years ago.

Even at that moment, the U.S. economy wasn’t anywhere close to hyperinflation, when prices rise uncontrollably, typically at rates of more than 50% per month.

How Is Inflation Calculated?

The BLS and the Bureau of Economic Analysis (BEA) both track inflation, and use similar methods and formulas. But because the data they use comes from different sources, their results aren’t the same.

•   The BLS calculates Consumer Price Index (CPI) inflation by tracking what Americans are actually buying. The government uses the CPI to make inflation-related adjustments to certain federal benefits, such as Social Security.

•   The BEA calculates Personal Consumption Expenditure (PCE) inflation using information reported by the companies that sell goods and services instead of the consumers who purchase them. The Federal Reserve focuses more on PCE inflation, but also considers other economic data when setting monetary policy.

Recommended: Should I Sell My House Now or Wait?

How Inflation Impacts You

High inflation can have an immediate impact on your budgeting and spending, and no one likes that much. But your feelings about whether inflation is good or bad may depend on where you are in life and how your overall finances are affected.

•   If you’re a first-time homebuyer, for example, higher prices and higher mortgage rates could push your dream out of reach.

•   People with high credit card debt can be negatively affected by inflation. If, during a period of high inflation, the Federal Reserve raised the federal funds rate in an effort to cool the economy, borrowers could expect the annual percentage rate (APR) on their revolving credit to increase.

•   Savers, on the other hand, may benefit if the Fed bumps up interest rates and financial institutions offer a higher annual percentage yield (APY) on savings accounts, money market accounts, and certificates of deposit.

•   That scenario may sound like especially good news to risk-averse retirees looking for a safe investment. But retirees on a fixed income are typically among the first to feel the painful squeeze of inflation.

•   So are small business owners, who often have to deal with higher costs for goods and services, employees who want cost-of-living increases, and customers who aren’t happy when their prices go up to cover those expenses.

•   Homeowners may not like the high prices they encounter when shopping for goods and services when inflation is high. But on the plus side, inflation may push up the value of their home and their home equity. And if they have a fixed-rate mortgage, they may find some comfort in knowing they’re paying less for that loan than they did when they took it out.

Recommended: Biweekly Money-Saving Challenge

The Takeaway

Inflation can be calculated in different ways, depending on the organization and its purpose. For instance, the Bureau of Labor Statistics (BLS) measures inflation by the Consumer Price Index (CPI), which tracks household purchases. The information is used to make adjustments to federal benefits such as Social Security. Using a salary inflation calculator can also help consumers understand how the rising cost of living might affect their finances and budget better.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What will $100,000 be worth in 10 years with inflation?

It’s difficult to predict what $100,000 could be worth 10 years from now without knowing what inflation will look like in the future. But say the average inflation rate levels out to a moderate 3% over the next decade. If that’s the case, it will take about $134,392 in 2035 to have the same buying power as $100,000 has in 2025.

How much would $50,000 in December 2018 be worth in December 2024 with inflation?

If you had $50,000 in December 2018, it would take about $62,811.22 to have the same purchasing power in December 2024.

What is $120,000 in 2000 worth today?

If you made $120,000 in 2000, you’d have to make $204,688 to have the same buying power today.

Photo credit: iStock/Prostock-Studio

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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