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 Cost of Living Adjustment, more commonly known as COLA, increases benefits administered by the SSA on a yearly basis. The COLA is designed to keep Social Security retirement, survivor and disability payments in line with inflation, so that purchasing power is not eroded over time.