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05 Jul 2026, 10:39 UTC · 4h ago

3 Things Retirees Need to Know About How the COLA Is Actually Calculated

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What the story claims

3 claims · each scored for market impact

What matters in this story

1
Social Security COLAs are calculated using CPI-W data from the third quarter, meaning they do not account for inflation spikes occurring in the final quarter of the year. — This creates a lag in purchasing power for a significant demographic of consumers, potentially dampening long-term retail demand during inflationary periods.
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The CPI-W formula typically underestimates the actual spending patterns of seniors, particularly regarding rapidly increasing healthcare costs. — Persistent underestimation of cost-of-living adjustments leads to a gradual decline in the real disposable income of retirees.
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3
Social Security benefits do not receive an annual adjustment if inflation data shows prices remained stagnant or declined. — This is a standard structural feature of the program with minimal immediate market-moving potential.
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