How does the COLA affect my Social Security retirement benefits?

Seniors, many of whom are on fixed incomes, are really battling to keep up as inflation is starting to affect their wallets across the nation.

In May, 23% of persons over 65 reported having trouble paying for essential home bills. In comparison to the same time last year, this is an increase of sixteen percent.

According to preliminary research findings published by the Senior Citizens League (SCL), the purchasing power of many Social Security recipients has decreased by almost 40% since 2000.

This loss is partly caused by the market's present impact of inflation.

The Cost-of-Living-Adjustment, sometimes known as COLA, is an annual percentage increase to Social Security benefits that is based on changes in market prices.

The COLA is determined using the Consumer Price Index, which tracks inflation across a broad range of goods and services.

The CPI-W, or Consumer Price Index for Urban Wage Earners and Clerical Workers, is the statistic used to calculate the Social Security COLA.

The CPI-W has shown an additional 70% price increase in the average cost of consumer goods since the 2022 COLA announcement.

The benefit amounts that are currently being distributed do not take these increases into account.

To calculate the COLA, the Social Security Administration gathers and examines CPI-W data from July, August, and September.