Here’s What Americans Really Think About Social Security COLAs
Social Security cost-of-living adjustments (COLAs) help adjust benefits for inflation. Unfortunately, these adjustments often don’t keep up with the actual costs facing recipients. For 2025, the COLA is a modest 2.5 percent. The Motley Fool found the vast majority of retirees say this is too low. A survey showed 54 percent of respondents viewed it as insufficient, with 31 percent calling it “completely insufficient.”
Why COLAs Don’t Add Up
The problem lies in how the COLA is calculated. Right now, Social Security uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). That index is calculated by the Bureau of Labor Statistics based on changes in the average prices of household goods such as food, housing, and transportation. This index focuses on the costs paid by workers, not retirees.
The Motley Fool says a better measure for calculating Social Security COLAs is the Consumer Price Index for the Elderly (CPI-E). This weighs categories such as healthcare and housing more heavily. These are places retirees tend to spend more on than individuals still working.
Because Social Security COLAs are not based on expenses impacting retirees the most, they tend to be smaller than they should be.
Need for a New COLA Calculator
The Social Security Expansion Act calls for using the CPI-E for Social Security COLA calculations — and that’s one of the main reasons The Seniors Trust is pushing Congress to enact this act. In addition to instituting a fairer COLA, it also calls for increasing monthly benefits and strengthening the long-term solvency of the Social Security program which would also greatly benefit seniors.
