- Social Security recipients receive a cost-of-living adjustment (COLA) annually to help maintain their buying power in retirement. The COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) data from the third quarter of the year, with the announcement usually made in mid-October. However, delays due to the government shutdown have pushed back the release of the September CPI-W data to October 24, 2025, affecting the size of the COLA retirees will receive.
- While the COLA is meant to keep pace with inflation, the current methodology has flaws as the CPI-W measures the spending habits of urban workers, not retirees who face higher inflation in areas like housing and healthcare. This discrepancy leads to a decline in the buying power of benefits over time, making retirees more reliant on their retirement plans. Suggestions to switch to a consumer price index for the elderly exist, but the financial implications for Social Security are a concern.
- Many retirees overlook maximizing their Social Security benefits, potentially missing out on an additional $23,760 annually. Understanding the strategies to boost retirement income through Social Security can provide retirees with the peace of mind they seek. Joining Stock Advisor can provide further insights into these "Social Security secrets" for maximizing benefits.
Read more at Nasdaq: This Is Exactly How Your 2026 Social Security COLA Will Be Determined