Cost-of-living adjustments, or COLAs, are designed to boost Social Security checks to keep up with inflation and the rising costs of goods and services. However, a major factor in these COLAs doesn’t focus on seniors at all.

The Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, factors into Social Security COLAs. This dataset includes information about the cost of goods and services that certain workers see. According to Investopedia, the CPI-W reflects the spending habits of low-income and middle-income individuals.

What does this mean for retirees? COLAs are based on data that doesn’t reflect the needs of seniors. When only information about wage earners is considered, important data about the cost of services like in-home care and items like prescription medications could be outweighed. Instead, Congress should establish an index that takes into account the expenses that matter to seniors. This could then impact the benefits that seniors receive.

NORA is urging Congress to pass The Guaranteed 3% COLA for Seniors Act. This legislation would establish an index that accurately reflects the spending of seniors. Additionally, it would ensure that benefits rise at least 3% each year – which we believe should be made retroactive to 2010. This could help seniors save and plan for expenses.

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