Sorry, Seniors: There May Not Be a Social Security COLA for 2021

Millions of seniors not only collect Social Security, but get the bulk of their retirement income from it. As such, beneficiaries tend to rely heavily on cost-of-living adjustments, or COLAs, to maintain their buying power. COLAs were implemented back in the 1970s to help Social Security recipients keep pace with inflation, but yearly raises are by no means guaranteed. Rather, they're determined by analyzing annual data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures fluctuations in the cost of common goods and services.

When the cost of those goods and services climbs, seniors on Social Security get a raise in the form of a higher COLA. When the cost of those goods and services holds steady or declines, seniors risk getting nothing. And unfortunately, that's the scenario beneficiaries may be looking at in 2021.

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