Last month, the Social Security Administration announced that beneficiaries will receive a 2.5% cost-of-living adjustment (COLA) in 2025. That revelation disappointed many Social Security recipients.

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.

An important aspect of Social Security benefits is the monthly payouts increase they receive in most years to (somewhat) keep up with inflation. This is called the Social Security cost-of-living adjustment (COLA).

In 2022 and 2023, many seniors on Social Security struggled to keep up with surging bills. In 2025, costs are expected to rise at a much slower pace. This means that even with just a 2.5% COLA, Social Security recipients may not end up losing out on so much buying power.

Millions of Americans will see changes to their benefits in the New Year. There will be an increase of 2.5 percent for retirees and those on disability benefits