On October 10, the Social Security Administration (SSA) announced that benefits would be getting a 2.5% cost-of-living adjustment (COLA) in 2025. And many seniors are no doubt unhappy about that given that 2025’s COLA is considerably smaller than the COLAs that have arrived in recent years.

But here’s the truth. It almost doesn’t matter what COLA Social Security recipients get in 2025. The unfortunate reality is that any COLA is likely to fail seniors due to a flaw in the way those raises are calculated.

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Social Security COLAs are based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from one year to the next. But the CPI-W does not do an adequate job of capturing the costs that Social Security beneficiaries commonly face. And so basing COLAs on it does seniors an injustice.

The Senior Citizens League reports that 2024’s average Social Security payments are only worth about $0.80 on the dollar compared to 2010. To put it another way, Social Security beneficiaries have lost about 20% of their buying power over the past 14 years.

The bad news is that for the time being, Social Security recipients are stuck with this less-than-ideal method for calculating COLAs. It will take a change on lawmakers’ part to use a different measurement, like the CPI-E (Consumer Price Index for the Elderly).

That said, if you’re worried about insufficient Social Security COLAs wrecking your retirement finances, you can get around that issue by setting yourself up with a larger monthly benefit to begin with. Here’s how.

1. Work at least 35 years

The monthly Social Security benefit you’re eligible for in retirement is based on your 35 most profitable years of earnings. But if you don’t have a full 35-year work history, you’ll have a $0 factored into your benefits calculation for each year you don’t have earnings on file. So if you’re nearing the end of your career and are a bit shy of 35 years of income, consider delaying retirement by a year or two to make up the difference.

2. Make sure your earnings record is accurate

The more money you earn during your career, the larger a Social Security benefit you stand to qualify for. But if the SSA has inaccurate wage data on file for you, it could result in a lower benefit than what you should be getting.

To avoid that, create an account on the SSA’s website and check your earnings statement each year. If you find that your income is underreported at any point in time, contact the SSA and work with the agency to get that data updated.

3. Delay your benefit claim until age 70

You’re entitled to your complete monthly Social Security benefit based on your individual earnings history at full retirement age. If you were born in 1960 or later, full retirement age is 67.

But if you delay your Social Security claim beyond that point, for each month that you do, your monthly retirement benefit increases by 2/3 of 1%. Put another way, that benefit grows 8% a year, and you can accumulate delayed retirement credits until the age of 70. So with a full retirement age of 67, it’s possible to boost your monthly benefit up to 24% — for life.

It’s unfortunate that Social Security’s annual COLAs do not do a good job of helping seniors keep up with their expenses. But if you start off retirement with a larger monthly benefit to begin with, you’ll be in an even stronger position to manage your senior living costs through the years.

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