The Social Security Administration (SSA) has confirmed that checks worth up to $5,108 will be deposited today for select Americans. This marks the first disbursement with the 2025 cost-of-living adjustment (COLA).

It’s not uncommon for seniors on Social Security to collect those benefits for two decades or longer. But in that long a time frame, the value of a dollar can seriously erode due to inflation. That’s why Social Security’s automatic cost-of-living adjustments,

Every year, the Social Security Administration, or SSA, examines inflation data and adjusts Social Security benefits accordingly. In short, the annual cost-of-living adjustment, or COLA, is designed to help retirees keep up with the rising cost of goods and services.

Social Security beneficiaries have relied on annual cost-of-living adjustments (COLAs) to maintain their purchasing power.

When you are on  Social Security, you can expect your retirement benefits to increase during most years. That’s because Cost of Living Adjustments (COLAs) typically happen automatically from year to year.

The cost-of-living adjustment (COLA) applied to Social Security payments in any given year is based on CPI-W inflation from the third quarter of the previous year. In that sense, COLAs are a reimbursement mechanism to compensate retirees for the buying power benefits lost in the previous year.