But a 2.5% COLA for 2025 stings because it's the smallest one to arrive in years. At the start of 2024, seniors on Social Security saw their benefits increase by 3.2%. And the year prior, Social Security recipients got a record-breaking 8.7% COLA. So a raise of just 2.5% seems awfully meager by comparison.

But when we look back at the data, it becomes clear that a 2.5% Social Security COLA isn't so terrible. In fact, it's a lot more generous than some of the COLAs beneficiaries have seen in the past. In 2024, Social Security benefits rose by 3.2%. The year prior, they increased by 8.7%. And in 2022, a 5.9% COLA came through.

Last month, the Social Security Administration revealed that benefits will receive a 2.5% COLA increase in 2025

Social Security's cost-of-living adjustment (COLA) isn't the only notable change to America's top retirement program in 2025.

A Social Security cost of living increase offers retirees options such as managing costs, saving or enjoying small splurges.

The reason Social Security benefits are eligible for an automatic cost-of-living adjustment (COLA) each year is that without an inflation-based boost, seniors would be guaranteed to lose buying power from one year to the next.

Gen Xers say they are worried they may not receive their benefits at retirement age if Social Security funds are depleted.

Various news stories about Social Security have made headlines throughout the year, ranging from questions concerning its solvency to arguments over how the program should be funded. Particulars

A new year brings new changes to the Social Security program. Increasing income limits could result in a larger tax bill for high-earning workers. That said, there is a silver lining these individuals can look forward to in 2025.