Rapid-inflation COLAs (2022-2023)
After 2022 inflation peaked near 9%, the SSA announced an 8.7% COLA for 2023, the largest since 1982. Beneficiaries got a $146 average monthly increase as prices for food, rent, and energy surged.
Retirees caught up partly with the prior year's price surge, but 2022's 5.9% COLA had already lagged actual inflation.
The episode showed the COLA formula's one-year lag: adjustments chase the previous year's prices, so beneficiaries lose ground in fast-inflation years and gain it back as prices cool.
The 3.6% adjustment for 2027 follows the same lagged mechanism, driven this time by the 2026 energy shock rather than pandemic-era supply problems.
