The earliest age to sign up for Social Security is 62. However, plenty of people live past their early 90s, which means that some Social Security recipients end up collecting benefits for more than 30 years.

Clearly, over a period that long, the value of a dollar can erode. That’s why Social Security benefits are eligible for an automatic cost-of-living adjustment (COLA) each year.

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But do those COLAs really help Social Security recipients gain buying power every year? Unfortunately, not even close.

Social Security COLAs tend to fall short

Social Security COLAs are not supposed to help seniors gain buying power so much as maintain the same level from year to year in retirement. But that doesn’t mean they do the job.

The Senior Citizens League reports that Social Security recipients lost 20% of their buying power between 2010 and 2024 because the COLAs they received during that window of time were insufficient. And if changes to how COLAs are calculated aren’t made, the problem could persist.

The issue stems from COLAs being based on the Consumer Price Index for Urban Wage Earners and Clerical Workers. But just by reading the index’s name, it’s clear that it doesn’t tend to focus on costs specific to seniors. Using a senior-specific index would likely result in larger COLAs and more buying power for retirees, but lawmakers would need to vote in that change.

Still, that doesn’t mean Social Security recipients will ever really be able to get ahead. So, if that’s one of your goals, you’ll need other sources of income.

Ways to gain buying power in retirement

You might assume you don’t need to gain buying power in retirement so much as retain it. But you never know when a need for more money might arise.

You may decide you want to age in your home, which could require renovations. The money for that will have to come from somewhere. You may also decide that you want to take advantage of your surprisingly good health and travel more than expected. That, too, could require extra money.

Your best bet for gaining buying power in retirement is to do two things. The first is to invest in assets that can gain value over time, like stocks or real estate.

This isn’t to say that the bulk of your portfolio should be in the stock market or a rental property, since there’s risk there. But if you’re able to invest in assets like these, you might see your nest egg grow in retirement rather than shrink.

The other option worth looking at is part-time or gig work. It’s something that could not only give you a paycheck but also help keep you busy. And believe it or not, holding down a job in retirement could be beneficial to your health, which could actually save you money on medical expenses.

Social Security COLAs aren’t as financially helpful to seniors as they should be. And you definitely can’t expect them to help you gain buying power. If that’s a goal, set yourself up with the right investments to make that happen and/or plan to work in some capacity as long as possible.

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