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Determining the 2026 Cost of Living Adjustment
COLA is determined each year since 1975, when automatic COLA determination began. It is based on the third quarter of the current year compared to the prior year’s third quarter, July, August, and September. The government uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This is the calculation used to help keep benefits up with inflation, but the effectiveness is often debated.
COLA, however, doesn’t always keep up with the cost of inflation. Since 2010, as noted in a MSN.com article, Social Security benefits have lost approximately 20% of their buying power, according to the Senior Citizens League. There have been three years that there wasn’t a COLA increase: 2010, 2011, and 2016, so you can not always depend on there being one. AMAC’s Social Security Guarantee (click here to view SSG) would provide an equal dollar COLA increase to each beneficiary each year, and no less than a one percent increase in the average benefit each year. In recommending this change, AMAC’s SSG would further recognize Social Security’s fundamental intent to protect lower earners from poverty, since it would redistribute the overall COLA dollars such that the lower earners receive the same dollar adjustment as higher earners.
For more information on the COLA, read the full article by Diego Perez Morales on MSN.com
This posting is presented for informational purposes only and does not represent legal or financial guidance. Any opinions or interpretations presented are either those of the original author or, in the case of articles authored by the AMAC Foundation, are the opinions of AMAC Foundation staff, originally trained and accredited by the National Social Security Association (NSSA) and certified via the AMAC Foundation. Any links included in the article are valid on the posted date; socialsecurityreport.org cannot guarantee the duration of the links’ validity. NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (https://amacfoundation.org/services/) or email us at ssadvisor@amacfoundation.org. Because we are a non-profit organization, there is no charge for these services.