With a little more than a month before the 2025 COLA kicks in, here's what you should know about the upcoming adjustment.

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.

Last month, the Social Security Administration announced that the next cost-of-living adjustment (COLA) will be 2.5%. Here's why the average take-home Social Security increase will be roughly 20% lower than they might expect.

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

However, there is a major silver lining to a more moderate COLA, and it will likely have an even better effect on your retirement than a slightly larger raise. The COLA is designed to help Social Security benefits keep up with rising costs over time.