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cost-of-living adjustment

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Cost-of-Living Adjustment
An increase to a wage, salary, or pension designed so that the real value remains the same. That is, a cost-of-living adjustment increases the underlying wage, salary, or pension so that it keeps pace with (but does not run ahead of) inflation. Federal pensions and Social Security include cost-of-living adjustments, though few other pensions do.

Cost-of-living adjustment (COLA). A COLA results in a wage or benefit increase that is designed to help you keep pace with increased living costs that result from inflation.

COLAs are usually pegged to increases in the consumer price index (CPI). Federal government pensions, some state pensions, and Social Security are usually adjusted annually, but only a few private pensions provide COLAs.


cost-of-living adjustment (COLA)

A change in payments, such as rent in subsidized housing, based on a change in the index that measures inflation.



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Byline: GUEST VIEWPOINT By Peter DeFazio For the first time in more than 30 years, seniors and disabled workers on Social Security will not receive a cost-of-living adjustment next year.
Payroll tax receipts generally hold up much better in recessions than do income taxes, but job losses have been so severe that the CBO expects them to decline slightly from 2008, while benefits rise almost 9 percent because of cost-of-living adjustments and the beginnings of the baby-boomer retirement wave.
Interestingly, the Social Security cost-of-living adjustments for 2008 were also announced recently.
 
 
 
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