Why the Next 3 Months Are Crucial for Social Security Recipients
Social Security recipients who rely on their benefits for the bulk of their income don't tend to have a lot of financial wiggle room. The reason? Those benefits only replace about 40% of the average wage-earner's pre-retirement income, and most seniors need a lot more than that to maintain a decent standard of living. Unfortunately though, many seniors depend heavily on Social Security in the absence of outside income, and it's these seniors who invariably await a generous cost-of-living adjustment (COLA) each year in the hopes of seeing their financial picture improve.
The purpose of COLAs is to help seniors on Social Security retain their buying power in the face of inflation. When the cost of common goods and services goes up, seniors need some sort of raise to avoid falling behind. Though COLAs are calculated automatically, they're not guaranteed. And in the past 11 years, there were three years in which seniors received no raise at all.
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Source Fool.com
