The 2025 Social Security cost-of-living adjustment (COLA) came in at just 2.5%. That's well under the 3.2% retirees got last year and far less than what many were hoping for. The high inflation over the last few years has made it difficult for retirees to afford their basic expenses,

With fewer Part D plans and a $2,000 out-of-pocket cap, beneficiaries must rethink their Medicare drug coverage for 2025. Medicare expert Jae Oh shares what’s new and how to adjust.

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.

Social Security's annual cost-of-living adjustments (COLAs) are calculated based on how inflation changes in the third quarter, the three-month period from July through September. In this scenario, inflation is measured using a subset of the Consumer Price Index (CPI) known as the CPI-W.

Seniors awaiting bigger Social Security checks next year may be shocked to discover higher Medicare premiums will eat up a chunk of their cost-of-living adjustment.

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

Maximum benefits increase too, and in 2025, the maximum benefit will exceed $5,000 for the first time. It came close in 2024 with a maximum benefit of $4,873. But next year's top Social Security beneficiaries will receive $5,108 per month. That's nearly $62,000 annually.

A 2.5% cost-of-living adjustment increase will mean an extra $50 a month for most Social Security and SSI recipients.