What Is a Cost-of-Living Adjustment (COLA), and How Does It Work?
A cost-of-living adjustment (COLA) is an increase made to Social Security and Supplemental Security Income (SSI) to counteract the effects of rising prices in the economy. The COLA is typically equal to the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for a specific period. COLAs were introduced in 1975 to protect against inflation, and the formula for determining COLAs has evolved over time. The COLA for 2023 was 8.7%, and for 2024, it is 3.2%.
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