Is the Social Security COLA Formula Broken? Here's What Experts Are Saying.
The Social Security COLA is supposed to protect retirees from losing ground due to inflation, but there could be a major flaw in its design.
Overview
Retirees who collect Social Security often depend heavily on their benefits to help them pay the bills. Since Social Security was created to help keep seniors out of poverty, it's important that these benefits are worth a meaningful amount of money so retirees can use them to cover some of their essential costs.
To help ensure that the value of benefits does not erode due to inflation, cost-of-living adjustments (COLAs) happen automatically in most years. Unfortunately, many experts believe that the formula used for these automatic adjustments is flawed and has resulted in retirees losing a substantial amount of their buying power.
Details
Here's the potential problem with the COLA, along with some options to provide retirees relief from the current issues.
Source
Originally published at www.fool.com.