Social Security's 2025 cost-of-living adjustment (COLA) took effect in January. Benefits will increase 2.5% this year, the smallest pay bump for seniors since 2021. Indeed, more than half of retired workers surveyed by The Motley Fool in October said the COLA was insufficient.

Social Security (retirement and survivors) recipients will now see a 2.5% increase in their next check and throughout the year. The COLA increase also extends to Supplemental Security Income and Social Security Disability insurance recipients.

The vast majority of seniors surveyed about Social Security's COLA say the number should be as much as five times higher than the government is forking over this year.

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.

One of the most important aspects of Social Security is that recipients are eligible for a cost-of-living adjustment (COLA) every year. These annual increases are designed to help seniors and those receiving Social Security benefits keep up with inflation.

A couple changes are coming to some people's finances in the new year.