Social Security Benefits Lose 13.7% Buying Power as Healthcare Costs Outrun COLAs
Updated
Updated · 24/7 Wall St. · May 30
Social Security Benefits Lose 13.7% Buying Power as Healthcare Costs Outrun COLAs
6 articles · Updated · 24/7 Wall St. · May 30
Social Security benefits lost an estimated 13.7% of buying power between 2016 and 2026, with seniors hit hardest as medical expenses consume a larger share of their checks.
COLAs are tied to the CPI-W, which tracks urban workers' spending rather than retirees' budgets, leaving annual increases poorly matched to seniors' heavier spending on premiums, deductibles and coinsurance.
CPI-E, a senior-focused inflation index, is often cited as a fix, but it remains a research measure with a smaller sample and wider margin for error.
Larger COLAs based on CPI-E could also deepen pressure on Social Security, which already faces a funding shortfall that could trigger broad benefit cuts in less than a decade.
As benefits lose buying power and major cuts loom, how can you secure your financial future in retirement?
Could the proposed fix for seniors' cost-of-living adjustments actually speed up Social Security's collapse?