The Social Security Administration determines inflation rates by comparing CPI from the third quarter of the current year to the third quarter of the previous year. COLAs are given to anyone who receives Social Security benefits, not just retirees. The SSA’s cost-of-living adjustment helps beneficiaries maintain purchasing power in times of inflation. COLAs are announced in October based on third-quarter CPI data. Projections are often incorrect until hard data is available. Increases are not guaranteed and are based on inflation rates. COLAs benefit disabled individuals, survivors, and SSI recipients. COLAs may not always keep pace with real-time inflation.

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