First introduced in 1975, the cost-of-living adjustment (COLA) system is intended to help beneficiaries — retirees who receive Social Security, including Old-Age, Survivors, and Disability Insurance (OASDI) and Supplemental Security Income (SSI) recipients — keep up with rising prices.
According to the Social Security Administration (SSA), a 2.8% COLA will increase monthly Social Security payments by $56 on average this year. COLAs aren’t designed to increase one’s wealth, but with so many retirees struggling to make ends meet, it would be helpful if their monthly checks weren’t subject to the depreciating effects of inflation.
