Should every Social Security recipient receive an annual COLA?

Given the state of the Social Security trust, something has to change- basically higher taxes or lower benefits.

One component of cost for the SS trust is the cost of living adjustment which applies to all recipients. Is that necessary? Today the maximum possible monthly benefit at full retirement age is $3,345 or $40,140 per year. A couple could receive $60,210 or more.

Presumably earning the Social Security maximum taxable wage or more means such individuals had the ability to save for retirement. Do they need a COLA or more accurately should they need a COLA?

One option to help the Trust is to delay any COLA for five years after starting to collect Social Security benefits if an individual begins with the maximum possible benefit.

Another possibility is simply to means test the COLA based on total, taxable or otherwise, income each year. If your total household income is $150,000 or more, no COLA.


  1. I hate high inflation, mostly because it raises my total income and starting with the 2023 tax year, I will have to start paying income taxes on part of SS income. Many years of high inflation and high colas and my tax bill and Medicare premium increases could exceed my total cola of my SS and military pension. So, as always, I will adjust my spending to ensure I am still saving 25% of my retirement income, for the future. As, future colas will not be of much help. I will be adding $3,000 in I-Bonds to my $10,000 in I-Bonds purchased this year, locking in 9.62% interest for the next six months.
    I believe nothing will be done to SS and the government will just borrow more to make sure everyone gets their inflated SS dollars.


  2. So……you want to turn Social Security into another welfare system, but one that is paid for directly by individuals?

    You stated: “Presumably earning the Social Security maximum taxable wage or more means such individuals had the ability to save for retirement. Do they need a COLA or more accurately should they need a COLA?” Doesn’t this also mean that they’ve paid the most into the system??

    Liked by 1 person

    1. Yes it does and their benefits are based on the highest taxable earnings. However, even now the benefit calculation favors lower income worker by providing higher credits to lower income break points. COLAs have not been paid for by current retirees


    2. I think that there should never have been COLAs. The system of paying into the trust fund was never set up to allow for COLAs.

      As soon as you add means testing it become totally another welfare program. It is bad enough that means testing is used to determine who pays income taxes on the “benefits”.
      Means testing puts a bad taste in my mouth like college loan forgiveness. Because I saved for retirement, I’ll get denied COLAs. BS.

      Either everybody gets COLAs or nobody. Maybe it’s time to scrap Social Security and start over.


      1. The system in the 1930’s wasn’t set up for a whole lot of things , and probably most people reading this blog would not have been covered under Social Security then. In addition to professionals and the self employed, millions of agricultural and service workers weren’t covered either. By the late 1940’s , payments to existing beneficiaries were recognized as inadequate and raised and SS was extended to other occupations. An ad hoc system of “COLA” went into effect also . Not called that, but that’s what it was. In 1972 Nixon authorized a huge ad hoc “COLA” and signed legislation for the present day automatic COLA to begin.


    3. Michael2 – Social Security is a welfare program. Most SS recipients get all FICA taxes back in just 8 years. I will have all my FICA taxes back in just 72 months of benefits at age 68. I started SS benefits at 62, someone waiting until FRA or age 70 may get their FICA taxes back even faster. It includes what my employers paid and has been adjusted for inflation. My 92 year old mother who started working in 1948 for $.75 per hour and retired at age 65 making $5.65 per hour. has collected over $250,000 in SS benefits. I am sure her and my father paid less than $ 20K in FICA taxes over their working years.


  3. Surely paying taxes is enough of a gotcha?

    None of this may matter…things are so cattywampus already in our economy and political discourse.

    No one can plan absolutely for retirement, and throwing new rules in the mix continuously keeps everyone guessing.


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