Explaining the Social Security COLA in Simple Terms

The Social Security cost-of-living adjustment, or COLA, is a yearly increase to benefits meant to help payments keep up with inflation.

According to an article by USA Today, the COLA is designed to boost benefit payments so recipients’ buying power doesn’t fall behind when the price of things like food, rent and gas increases. The government looks at inflation data to determine how much prices have risen and then raises Social Security benefits by a matching percentage for the next year.

This year’s COLA was 2.8 percent. Predictions are that next year’s will be higher, but we won’t know until October. That’s because the government compares prices from one year’s late summer to the next. Any increase will take effect in January.

The Seniors Trust is committed to improving the well-being of older Americans. We are doing that financially by encouraging lawmakers to enact the Social Security Expansion Act. This landmark piece of legislation will give retirees an immediate increase of about $200 a month in benefits, a fair annual COLA, increased minimum benefits, and ensure the long-term solvency of the Social Security program.