Many retirees look forward to the annual Social Security cost-of-living adjustment (COLA). After all, the increase is meant to help benefits keep up with inflation and rising living costs. But when the first deposit arrives, some people are surprised to find that their bank account doesn’t show the full increase—or sometimes even looks smaller. That’s because your deposit decrease isn’t always about the benefit itself going down.
Instead, deductions, taxes, and other adjustments can reduce the amount that actually lands in your account. In some years, higher healthcare premiums or tax withholding can eat into most of the COLA increase. Here are eight common reasons your Social Security deposit decrease might happen even after a raise.
