Millions of older Americans collect a benefit from Social Security each month. For many of them, that money serves as their primary source of income. That's why Social Security's cost-of-living adjustments, or COLAs, are so important for many retirees.

Without automatic COLAs, seniors on Social Security could be looking at the same monthly benefit year after year. For those without additional income to fall back on, that practically guarantees a loss of buying power over time. The Social Security Administration (SSA) doesn't want that to happen, which is why automatic COLAs were introduced in 1975.

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Source Fool.com