Social Security COLA Formula Erodes 13.7% of Seniors' Buying Power Over 10 Years

3 articles · Updated · The Motley Fool · Sep 4

13.7% of Social Security buying power has vanished over the past decade, according to the Senior Citizens League, raising the risk that the 2027 COLA again falls short of seniors' actual costs.
CPI-W drives those annual adjustments, but that index tracks younger workers' spending rather than retirees' budgets, where medical care carries more weight and often rises faster than overall inflation.
CPI-E has long been proposed as a better yardstick for older Americans, yet lawmakers have resisted switching because the index is still considered experimental and could lift benefit costs.
That reluctance also reflects Social Security's broader financing shortfall, which makes larger COLAs harder to adopt even as current calculations keep lagging seniors' real-world expenses.