Proposed Legislation Could Lead to Massive Increase in Annual Social Security COLA

Wednesday, 1 May 2024, 10:03

The Social Security Administration may be on the brink of implementing a major change to how it calculates the annual cost-of-living adjustment (COLA) for benefits. Lawmakers are proposing to replace the current inflation index with one that more accurately reflects the expenses of older Americans. This change could potentially result in higher COLAs for retirees in the future, providing a much-needed boost to their retirement income.

https://store.livarava.com/d929f30b-07a2-11ef-a6c0-63e1980711b2.jpg — Proposed Legislation Could Lead to Massive Increase in Annual Social Security COLA

Calculating your COLA

COST-OF-LIVING ADJUSTMENT (COLA) for Social Security benefits is based on inflation, specifically the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Legislation has been proposed by U.S. Rep. Ruben Gallego, D-Ariz., and Sen. Bob Casey, D-Penn., to replace CPI-W with the Consumer Price Index for the Elderly (CPI-E), focusing on expenses more relevant to seniors.

Impact on COLA Figures

COLA using CPI-W ranged from 0% to 8.7% in the last decade.
Adopting CPI-E could lead to higher COLAs, as evident from past years' data.

This potential change could significantly impact retirees and their household income, offering a more robust financial cushion during retirement.

This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.

Calculating your COLA

Impact on COLA Figures

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