Living on Social Security alone is not optimal, nor is being in a position where most of your income comes from those monthly benefits. Unfortunately, that's the position a lot of seniors are in today. And that means annual Social Security cost-of-living adjustments, or COLAs, are extremely important.

COLAs allow Social Security beneficiaries to maintain their buying power as inflation drives the cost of living upward. Each year, benefits are eligible for an automatic COLA, which is calculated based on third-quarter inflation data.

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Source Fool.com