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Is a High Cost of Living Increase for Social Security Recipients Actually a Good Thing? - Yahoo/Finance.com
Seniors anxiously await the announcement of the cost-of-living increase (COLA) each year. But the truth behind COLAs is that inflation is increasing. Social Security COLA increases were not always automatic. Before 1975, Congress had to pass legislation to raise benefits, and those raises were not regular and usually lagged behind inflation. Recipients could go for years without an increase and then usually received a large one.
Congress passed a law in 1975 requiring Social Security benefits to rise with a measured increase in consumer prices. In 1980, COLA was 14.3%, the largest COLA increase on record! It sounds great, doesn’t it! Until you think about how high inflation had to be in 1979, and how seniors had to struggle that year.
Dana George has written an article on this topic explaining why a large COLA of 8% or more is a sign that seniors are struggling. The expected COLA for 2027 at this time is estimated to be 3.9%. The actual COLA increase won’t be released until around mid-October, as it is based on July, August, and September compared to the same months of the prior year. To read the full article, click here….
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