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Social Security COLAs fail to keep up with rising healthcare costs, eroding seniors' benefits buying power.

Market News
30 May 2026
24/7 Wall Street
View Source
Neutral
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Social Security benefits include annual cost-of-living adjustments (COLAs) to help keep up with inflation, but these adjustments are based on the CPI-W index, which reflects worker spending patterns, not seniors'. Since healthcare costs for seniors rise faster than general inflation, Social Security benefits have lost about 13.7% of their buying power from 2016 to 2026. A proposed fix is to use the CPI-E index, which better reflects elderly spending, but lawmakers hesitate due to concerns about accuracy, fairness, and Social Security's funding challenges. Retirees should plan for rising healthcare expenses and consider supplemental income sources as Social Security may face cuts in the near future.

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