The Social Security Administration announced its annual cost-of-living adjustment (COLA) yesterday. With all the focus on this big announcement, many people might be wondering what exactly the COLA is and why we have one.
COLA History
We didn’t always have annual COLAs. When Social Security was first established, beneficiaries received the same amount every year. According to the Social Security Administration, it was not until the 1950 Amendments that Congress first legislated an increase in benefits. A second increase was legislated in 1952.
From that point on, benefits could only be increased if Congress enacted special legislation for that purpose. However, in 1972, legislation was changed to provide annual cost-of-living allowances based on the annual increase in consumer prices. That took effect in 1975.
Restoring Financial Security
Unfortunately, COLAs no longer reflect the real expenses faced by older Americans. Making matters worse, for too long politicians slashed COLAs — or even took them away altogether — forcing retirees to live on monthly benefits that were well below annual inflation rates or failing to keep up with rising costs.
The Council of Seniors is working hard to pass The Social Security Restitution Act. This is a game-changing piece of legislation that issues retired workers a $970 check to make up for years of inadequate cost-of-living adjustments.
“Every retiree who paid into this system for decades deserves a Social Security benefit that reflects their real cost of living,” said Barbara Godwin, executive director of Council of Seniors. “We’re calling on Congress to stand up for the millions of seniors who have been shortchanged, and we’re ready to work with any member who wants to lead on this issue.” One of the most important ways to help support this legislation is by signing a petition to Congress, spreading the word with your friends and neighbors and by contacting your members of Congress