New Yorkers will see the smallest rise in their Social Security cost-of-living adjustment (COLA) since 2021 next year.

The Social Security Administration announced Thursday the 2025 COLA will be 2.5%, down from 2024's 3.2% increase. Average beneficiaries will see their monthly payments rise by $50 next year to $1,957, up from $1,907 in January 2024.

Annual COLA is meant to keep beneficiaries' purchasing power from being eroded by inflation. However, USA TODAY reported that hasn't been the case, according to many older Americans. Eighty-three percent of older adults said in August a COLA of less than 3% would be insufficient, an AARP survey of 1,000 adults ages 50 and older says.

Here's what to know.

COLA is based on the percentage increase in the consumer price index for Urban Wage Earners and Clerical Workers from July through September of the last year as compared to the same three months of the current year. CPI-W tracks the overall inflation rate but can differ slightly.

In September, annual CPI-W rose 2.2% compared with a 2.4% overall inflation increase.

Payments vary based on several factors, including years worked, total Social Security taxes paid, and retirement age:

Emily Barnes reports on consumer-related issues for the USA TODAY Network's New York Connect Team, focusing on scam and recall-related topics. Follow her on Twitter and Instagram @byemilybarnes. Get in touch at [email protected].