Showcasing the Deficiency of the Current COLA Process
Social Security’s annual cost-of-living adjustment (COLA) process supposedly measures the cost increases across the spectrum of spending categories Americans face. It’s based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), and it’s been that way for nearly 50 years. So, while that may be an appropriate measurement tool for the population in general, does it really represent the costs seniors face in their retirement years? The Senior Citizens League (TSCL) doesn’t think so, citing a substantial difference between COLAs since 2000 and the increase in costs seniors face that has led to a shortfall of more than $500 per month that has developed as a result of not calculating COLAs using expenditure categories common to seniors. The Motley Fool’s Sean Williams takes an in-depth look at this topic in a post on nasdaq.com, which you can read here.