Social Security benefits are crucial for retirees, making up around 40% of pre-retirement income and ensuring support throughout retirement. Cost of Living Adjustments (COLAs) are intended to increase benefits in response to inflation; however, many of these adjustments have been disappointingly low. Historical data reveals that some years saw COLAs as low as 0% or limited to 2%-3%, which can fall short of seniors' financial needs. Understanding these trends can help retirees gauge their financial preparedness for retirement.
In fact, there have been a number of very small COLAs over the years. Let's take a look at the 20 smallest so you can see just how little retirees sometimes get.
COLAs are periodic raises made available when a financial index reveals that costs are going up. COLAs aren't always very generous, though.
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