Social Security Is About to Do Something It's Only Done 3 Times Before

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The program of Social Security has been around for a long time. Seniors have come to expect an annual cost of living adjustment.

Seniors on Social Security are given the chance to maintain their buying power as living costs rise. Inflation erodes the value of a dollar. Seniors who get the bulk of their retirement income from Social Security would struggle immensely if benefits were to stay the same indefinitely. It's not certain whether they actually do the trick.

Social Security will be giving seniors a boost in benefits in the years to come. Next year's cost of living adjustment is the highest that Social Security recipients have received in decades.

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Seniors are getting a COLA above 8%

Legislation was used to determine Social Security benefit increases. Since 1975, Social Security has been eligible for an automatic cost of living adjustment that is pegged to the rate of inflation.

The Social Security Administration just announced that seniors will get an 8.7% cost of living adjustment in three years. In the past, Social Security has only given out a COLA above 8% three times.

• In 1979, it announced a 9.9% COLA
• In 1980, it announced a 14.3% COLA
• In 1981, it announced an 11.2% COLA

Even though the recent 8.7% COLA is not the largest Social Security has ever given, it is still significant. Some seniors may be disappointed with the number, but it could be a good boost.

How far will an 8.7% COLA go?

The big question is that. Senior citizens on Social Security have lost buying power due to the inability of COLAs to keep up with inflation.

The failure of this-year's COLA is a prime example. Seniors on Social Security saw their benefits go up at the beginning of the 21st century. That was a pretty significant raise.

Over the past 10 months, the rate of inflation has been much higher. Senior citizens on Social Security lost buying power when their COLA was relatively generous.

Will this newly announced 8.7% COLA hold up in the long run depends on inflation levels in the coming months Seniors might gain a bit of buying power if inflation cools down. Even with one of the most substantial COLAs Social Security has ever seen, seniors may not be able to make ends meet in 2023.

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