How often does the Social Security Administration conduct cost-of-living adjustments?

The Social Security Administration (SSA) conducts cost-of-living adjustments (COLAs) annually. These adjustments are designed to ensure that Social Security benefits keep pace with inflation and maintain the purchasing power of beneficiaries. The COLA is based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which reflects the cost of a specified basket of goods and services.

Conducting these adjustments only once a year allows the SSA to review and analyze the inflation data comprehensively before implementing any changes. If inflation levels warrant an increase, the adjustment is applied in January of each year, impacting the benefits received by those relying on Social Security, including retirees and individuals receiving disability benefits.