Social Security includes cost-of-living (COLA) adjustments based on increases in the Consumer Price Index for Wage Earners and Clerical Workers (CPI-W) so that benefits for Social Security keep pace with inflation. The official calculation for a COLA adjustment is usually released in October and is based on the average CPI-W from the 3rd quarter of the current year compared with the average CPI-W from the same quarter from the previous year.
Forward-looking projections by analysts and industry experts estimate that the COLA adjustment may increase by as much as 6.2% when the Social Security Administration announces the potential COLA increase in a few short months. This is merely a projection and may change but if it does increase by that estimated amount, it will be one of the largest increases in nearly 3 decades. We will have to wait and see.