How Well Are Seniors On Social Security Really Protected Against Inflation?
The monthly Social Security benefit you start out collecting isn't necessarily the same benefit you'll receive for the rest of your life. That's because benefits are subject to annual cost-of-living adjustments, or COLAs.
The purpose of COLAs is to help seniors on Social Security maintain their buying power as inflation drives living costs up. Over time, living costs tend to rise naturally. If Social Security benefits were to stay the same forever, seniors would no doubt be at a huge disadvantage. But since some seniors collect Social Security for 30 years or longer, it's only fair to boost them in a manner that aligns with rises in living costs.
But while Social Security is supposed to protect seniors from inflation, in reality, it often falls short. And that's why retiring on those benefits alone is a truly dangerous idea.
Source Fool.com
