Each year, tens of millions of retirees collecting Social Security benefits anxiously await the upcoming COLA, or cost-of-living-adjustment (COLA). The COLA is a pivotal part of the Social Security program that reflects the next year's increase in Social Security benefits.

The Cost of Living Adjustment is rising in 2025, which will change the amount of money people will receive in their Social Security checks.

Technically speaking, this is the 2024 COLA, as it goes into effect in December 2024. However, because Social Security is paid a month in arrears, this increase will be reflected in the payment that beneficiaries receive in January. For this reason, it is often referred to as the 2025 COLA.

Social Security retirement and disability benefits for 2025 will start to roll out for millions of Americans as early as Tuesday and throughout January. Why it matters: Benefits increase by 2.5% and about $50 a month but it's the lowest benefit increase in recent years.

Social Security beneficiaries in the U.S. will see a 2.5% increase in their monthly payments. This adjustment, based on the Cost of Living Adjustment (COLA), aims to counteract inflation's impact on purchasing power.