Social Security benefits will arguably lose buying power next year because the 2.5% COLA understates inflation.

In December, SSI recipients will receive their payments a day early – Dec. 31 – because Jan. 1 is the New Year’s Day holiday. These checks will reflect two different amounts because the 2025 Cost of Living Adjustment increase will apply to the payment made on Dec. 31.

Medicare Part B premiums are rising again in 2025. The jump outpaces both Social Security's 2025 COLA and inflation, further squeezing seniors.

If it weren't for Social Security, millions of older Americans would no doubt struggle to keep up with their ongoing expenses. That's what makes Social Security's cost-of-living adjustments (COLAs) so important.