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

Social Security will see several major changes take effect on Jan. 1. Some of them, like the 2.5% cost-of-living adjustment (COLA), will affect all program recipients. But a small group of Social Security beneficiaries will reach a major milestone next year that will have them collecting larger checks than anyone has in the history of the program.

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.

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

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.