The Social Security Administration announced it would be increasing benefits by 2.5% to account for cost-of-living adjustments in January 2025. On average, this means that beneficiaries will see an extra $50 in their monthly benefits allotment.

Social Security benefits are given a cost of living adjustment each year. The 2025 COLA increase is the smallest since 2021.

The Social Security Administration released news on Thursday, Oct. 10, explaining that beneficiaries will receive a 2.5% cost-of-living adjustment (COLA) in 2025. That means the average monthly retired worker benefit will increase from $1,920 in August 2024 to $1,968 in January 2025. Retired workers haven't received a smaller raise since 2021.