American Seniors Seek Changes in Social Security Adjustments
Many seniors in the U.S. are expressing dissatisfaction with how social security adjusts for inflation, calling for a change in the system.
A recent report from the Senior Citizens League (TSCL) highlights the strong desire among retirees for a better method of calculating annual cost-of-living adjustments (COLA). In a survey of 1,192 participants aged 62 and older, about 34% indicated that updating the COLA formula should be their primary focus for enhancing Social Security benefits.
When asked about specific policy changes aimed at boosting future COLAs, a significant majority of older adults showed support for using a more targeted measure of inflation.
At present, the Social Security Administration (SSA) bases COLA on the consumer price index for urban wage earners (CPI-W). This index reflects the spending patterns of younger urban workers rather than the elderly. Since 1975, annual COLAs have been calculated using CPI-W data from the third quarter of the year (July to September), aiming to align benefits with rising costs related to necessities like housing, food, and healthcare.
This year, the increase was 2.5%. However, projections based on current CPI-W measurements suggest that the COLA for 2026 might rise by only 2.6%. Yet, many retirees feel that this formula is failing them.
According to the TSCL survey, 68% of seniors are in favor of switching from the current CPI-W approach to the elderly consumer price index (CPI-E). Developed by the U.S. Bureau of Labor Statistics, CPI-E specifically tracks spending habits of individuals over 62, focusing on vital areas like healthcare, housing, and prescription medications.
“CPI-E is designed to better reflect the spending habits of people over the age of 62,” noted Colin Ruggiero, co-founder of DisabilityGuidance.org. “It gives more weight to healthcare and housing costs, which are increasingly burdensome for older adults. With CPI-E, COLAs would be more relevant and responsive to the actual financial challenges they face.”
Chris Motola, a financial analyst, pointed out that the main advantage of CPI-E is its focus on healthcare and housing, which heavily impact seniors’ finances.
Another appealing idea is to compensate for past inadequacies.
A TSCL survey revealed that 57% of participants support one-time “catch-up” COLA payments to address years when benefits fell short of covering living expenses.
Ruggiero mentioned, “Catch-up COLA would acknowledge that prior adjustments have not kept pace with reality. While it’s doable, it would require Congressional approval and be costly.” He added that politically, this could be framed as a revision rather than just a new expenditure.
However, the limitations of these proposals are evident. While COLA reforms could help maintain older adults’ purchasing power, experts caution that they won’t resolve every issue.
“Adjusting the COLA is a solid first step, but it’s not the only solution,” Ruggiero emphasized. “We also need broader reforms to fortify the overall retirement system, ensuring the adequacy of benefits, solvency, and support for low-income seniors.”
Motola concurred, stating, “It would be a significant improvement, but the root problem is that Social Security wasn’t designed to carry the full burden. This has made it challenging for people to save for retirement, and pension losses are placing additional strain on the system.”
