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

The 2025 Social Security cost-of-living adjustment (COLA) came in at just 2.5%. That's well under the 3.2% retirees got last year and far less than what many were hoping for. The high inflation over the last few years has made it difficult for retirees to afford their basic expenses,

Broadly speaking, the older you are, the less exposure to the stock market you're supposed to take on. When you need safety and certainty, more reliable investments like interest-bearing bonds and even higher-yielding cash balances are prioritized. And understandably so.

Declining inflation led to the lowest cost-of-living adjustment since 2020, with the 2025 COLA set to rise 2.5%.

The Social Security program undergoes several changes each year to keep benefits aligned with wages and inflation. It is crucial that retired workers and other beneficiaries understand those changes. Social Security is often a major source of income, so misconceptions and knowledge gaps can lead to serious financial planning mistakes.

A 2.5% cost-of-living adjustment, Medicare Part B premiums and tax liabilities are key changes to watch for that affect 2025 Social Security benefits.

Social Security beneficiaries will soon experience a welcome change when benefits climb due to a cost-of-living adjustment.

The good news is that the earnings-test limits are going up in 2025 from $22,320 to $23,400. From there, $1 in Social Security benefits will be withheld per $2 of earnings.