Social Security benefits are eligible for annual cost-of-living adjustments (COLAs), calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). However, if the CPI-W does not increase, benefits will not receive a COLA that year, highlighting the unpredictability of Social Security adjustments. While benefits cannot decrease due to inflation, they could remain stagnant in years when the CPI-W does not rise. Understanding how COLAs work is crucial for retirees relying on these benefits over potentially two decades.
SOCIAL SECURITY BENEFITS CAN RECEIVE COLAs ANNUALLY, BUT THIS DOES NOT GUARANTEE AN INCREASE EVERY YEAR, DEPENDING ON PRICE INDEX CHANGES.
COLAs ARE BASED ON THE CONSUMER PRICE INDEX AND CAN VARY, WITH NO NEGATIVE ADJUSTMENTS POSSIBLE, ONLY NO INCREASES.
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