Social Security COLA Falls Short Against Real Inflation for Seniors
January's 2.8% Social Security cost-of-living adjustment (COLA) trails the 3.1% inflation rate older Americans actually face—particularly for groceries, medicine, and housing. This structural gap stems from the Bureau of Labor Statistics' CPI-W calculation method, which underweights senior spending patterns.
Historical data shows COLAs have consistently lagged behind healthcare and housing inflation since 2000. AARP surveys indicate only 22% of Americans over 50 believe the adjustment keeps pace with living costs. "The COLA helps but doesn't reflect where retirees feel the pinch," notes PSECU CFO Gina Seibert.
The discrepancy highlights a growing vulnerability: benefits designed to preserve purchasing power are quietly eroding it. With healthcare costs rising 4.2% annually versus the overall 2.8% COLA, retirees increasingly dip into savings to bridge the gap.
