Here's Why a 1.6% Social Security COLA Isn't So Bad
The Social Security Administration just announced that recipients will be getting a 1.6% raise going into 2020. That raise comes in the form of a cost-of-living adjustment, or COLA.
Implemented back in the 1970s, automatic COLAs are designed to help seniors maintain their buying power when inflation causes the cost of goods and services to rise. But don't be confused by the word "automatic" -- COLAs vary from year to year, and they're based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
Historically, COLAs have been as high as 14.3%, though in recent years, we haven't seen numbers anywhere close. Still, 2020's 1.6% COLA may seem like a slap in the face compared to 2019's far more generous 2.8% COLA. In fact, millions of seniors are no doubt up in arms over the latest news, but here's why they actually shouldn't be.
Source Fool.com
