On Oct. 10, the Social Security Administration (SSA) dropped a bombshell by announcing that monthly benefits would be rising by 2.5% in 2025. That's a considerably lower cost-of-living adjustment, or COLA, than 2024's 3.2% increase. And it's also the smallest Social Security COLA to arrive since 2021 when benefits rose by just 1.3%.

Now that the 2025 COLA increase has been announced by the Social Security Administration, here's what you need to know.

AARP analyzes how Social Security benefits measure against local living expenses. Find out which states offer the best support for retirees and tips for effective retirement budgeting.

However, Social Security has consistently struggled to keep up with rising costs. In fact, inflation has outpaced the COLA in four of the last five years. The only year in which the COLA came out ahead of the inflation rate was 2023, which saw a record-breaking 8.7% COLA -- the highest adjustment in roughly 40 years.

With the 2025 COLA announcement, the average Social Security check for individual retirees will increase from $1,927 per month to $1,976

The Social Security Administration recently announced the 2025 cost-of-living adjustment (COLA). Many retirees feel discouraged by the 2.5% increase, the lowest since 2021. Once the 2025 COLA takes effect,