Social Security recipients can expect a 2.5% cost of living adjustment in their payments starting in 2025. Jenn Jones, AARP vice president of government affairs, joins Wealth! to break down what the adjustment means for retirees.

"Because Social Security is one of the few federal programs that's inflation-adjusted, it means that as we continue to moderate inflation, Social Security recipients will see their cost of living adjustment go down. But again, that is a good thing because that means you are paying less at the pump. You are paying less at the grocery store. You're paying less for everyday expenses," Jones tells Yahoo Finance.

While Social Security recipients will see a 2.5% increase in their payments, she explains that many feel the adjustment is "insufficient." However, she argues that "every little bit helps," especially as Social Security is the primary source of retirement income for 40% of Americans: "That reliable additional income really does matter for those on fixed incomes."

Watch the video above to also hear what Jones says about the future of Social Security.

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This post was written by Melanie Riehl