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Social Security Benefits and Inflation

The COLA (cost of living adjustment) is perhaps Social Security's most powerful long-term planning benefit. For an 85-year-old person who started benefits 20 years ago, cumulative COLAs now provide more benefit than the starting benefit itself. Each year, all Social Security retirement benefits are adjusted dollar-for-dollar for Consumer Price Index (CPI) inflation, creating a direct offset against inflation (as measured by this index).