Every year, Social Security benefits are eligible for a cost-of-living adjustment (COLA). The purpose of COLAs is to increase benefits in line with inflation so that Social Security recipients don't lose out on buying power.

But in 2025, Social Security benefits will only rise by 2.5%. That's the smallest increase in four years — and amounts to a mere $50 increase per check for more than 72.5 million Americans.

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In fact, for some older Americans, a 2.5% Social Security COLA will mean having to resort to measures such as only shopping at discount stores, skimping on heat and air conditioning to keep utility costs low, and making dietary adjustments to minimize grocery bills.

Now, in reality, a 2.5% Social Security COLA makes sense for 2025 given a recent cooldown in inflation.

The problem, however, is that Social Security COLAs are based on changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers, an index that doesn’t accurately reflect the costs that tend to be specific to seniors who receive those benefits.

Earlier this year, the Senior Citizens League found that Social Security recipients have lost 20% of their buying power since 2010 — and that accounts for recent COLAs that were fairly generous.

If you’re someone who’s reliant on Social Security to pay the bills, the situation isn’t entirely hopeless. Here are a few ways to stretch your retirement budget.

1. Keep housing costs as low as possible

Housing is many seniors’ largest monthly expense — and it may still be your largest expense even if you’re mortgage-free, as unexpected home repairs and property taxes still factor in.

To help reduce costs, consider downsizing your home, especially if you’re no longer utilizing all the space. A smaller home will also cut down on your energy bills.

Another option is to move to an area with lower property taxes. You can also check to see if your state has any tax programs for seniors. You may be eligible for a rebate or tax freeze, which could also work wonders for your strict retirement budget.

2. Be savvy with Medicare

A Fidelity report puts the cost of healthcare in retirement at $165,000 for the average 65-year-old. Lowering your healthcare costs could help your Social Security checks go further.