Provisions Affecting Cost-of-Living Adjustment
An annual cost-of-living adjustment (COLA) applies to benefits after initial eligibility. We provide a summary list of all options (printer-friendly PDF version) in this category. For each provision listed below, we provide an estimate of the financial effect on the OASDI program over the long-range period (the next 75 years) and for the 75th year. In addition, we provide graphs and detailed single year tables. We base all estimates on the intermediate assumptions described in the 2024 Trustees Report.
Choose the type of estimates (summary or detailed) from the list of provisions.
| Number | Table and graph selection |
|---|---|
| A1 |
Starting December 2025, reduce the annual COLA by 1 percentage point.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| A2 |
Starting December 2025, reduce the annual COLA by 0.5 percentage point.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| A3 |
Starting December 2025, compute the COLA using a chained version of the consumer
price index for wage and salary workers (CPI-W). We estimate this new computation
will reduce the annual COLA by about 0.3 percentage point, on average.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| A4 |
Starting December 2027, compute the COLA using a chained version of the consumer
price index for wage and salary workers (CPI-W). We estimate this new computation
will reduce the annual COLA by about 0.3 percentage point, on average. The new COLA
will not apply to DI benefits. It will apply to OASI benefits, except for those
of formerly disabled-workers who converted to retired-worker status.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| A5 |
Starting December 2025, add 1 percentage point to the annual COLA for beneficiaries
who have lived past a "specified age". The "specified age" is the sum of: (1) 65 and
(2) the unisex cohort life expectancy at age 65.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| A6 |
Starting December 2026, compute the COLA using the Consumer Price Index for the Elderly
(CPI-E). We estimate this new computation will increase the annual COLA by about 0.2
percentage point, on average.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision:
|
| A7 |
Starting December 2025, reduce the annual COLA by 1 percentage point, but
not to less than zero. In cases where the unreduced COLA is less than 1 percentage
point, do not carry over the unused reduction into future years.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| A8 |
Starting December 2025, for OASI beneficiaries only (DI beneficiaries would
only be affected when their benefit converts to OASI at NRA), the annual COLA
would be based on the chain-weighted version of the CPI-U.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| A9 |
For single/head-of-household/married-filing-separate taxpayers with modified
adjusted gross income (MAGI) below $110,800 and for joint filers with MAGI below
$221,500 for December 2026 ($85,000 and $170,000 multiplied by estimated CPI-U
for 2018-2026), use the chain-weighted version of the Consumer Price Index for
All Urban Consumers (C-CPI-U) to calculate the cost-of-living adjustment (COLA),
beginning with the December 2026 COLA. For those beneficiaries whose MAGI is above
these thresholds, provide no COLA. Use prior tax year income data for this determination.
Use the chain-weighted CPI for the COLA for years prior to benefit receipt. Index
the eligibility income threshold amounts to the CPI-U after December 2026.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |