The reason Social Security benefits are eligible for an automatic cost-of-living adjustment (COLA) each year is that without an inflation-based boost, seniors would be guaranteed to lose buying power from one year to the next.

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).

Social Security beneficiaries will see a 2.5% increase in their benefits starting in 2025. This cost-of-living adjustment (COLA) is the lowest since January 2021, which saw a 1.3% adjustment. The average recipient will see an increase of about $50 per month.