Have you seen those eye-catching headlines promising a $598 Cost-of-Living Adjustment (COLA) for Social Security recipients? Before you start planning how to spend that money, take a deep breath.
The rumors spreading across social media and certain websites aren’t telling the whole story.
As someone who has helped countless retirees navigate their Social Security benefits over the past decade, I’ve watched these misleading claims cause unnecessary confusion and disappointment.
Last week, my own mother called me, excited about the “huge increase” she had read about online.
I had to gently explain that things weren’t quite as advertised.
The truth about COLA adjustments is more nuanced than catchy headlines suggest, and understanding the real numbers matters for anyone relying on Social Security for their financial security.
The Origin of the $598 COLA Rumor
The $598 figure didn’t appear out of thin air.
It stems from a misinterpretation of how the Social Security Administration (SSA) calculates benefit increases.
The confusion typically arises when someone takes the average Social Security retirement benefit and applies the announced COLA percentage to it.
However, this creates a misleading one-size-fits-all number that simply doesn’t reflect reality.
I remember sitting at my kitchen table with retirement paperwork spread everywhere when my neighbor knocked on my door.
“Did you hear about the big increase coming?” she asked excitedly.
After explaining how the calculations actually work, her excitement turned to understanding – and a bit of frustration at having been misled.
How COLA Is Actually Determined
The Social Security Administration determines the annual COLA based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
This index, maintained by the Bureau of Labor Statistics, tracks the prices of a basket of goods and services that reflect typical spending patterns.
When I explain this to clients, I often use the grocery store analogy.
Imagine filling your cart with the same items every month and tracking how the total bill changes over time.
That percentage increase is essentially what the SSA looks at when determining COLA.
The actual calculation involves comparing the average CPI-W for the third quarter of the current year to the same period from the previous year.
This method ensures adjustments reflect real economic conditions rather than short-term price fluctuations or political promises.
During my years working with a financial advisory firm, I witnessed firsthand how COLA announcements affected retirees differently.
Some years brought substantial increases, while others barely moved the needle on monthly checks.
Your Actual Increase: Why $598 Isn’t Universal
Here’s where understanding becomes crucial: the COLA percentage is applied to your specific benefit amount, not a universal fixed dollar amount.
If the SSA announces a 3% COLA for the upcoming year, someone receiving $2,000 monthly would see a $60 increase.
Someone receiving $3,000 would get a $90 boost.
I’ll never forget Mrs. Johnson, a retired teacher who came to our office confused about why her increase didn’t match what her friend received.
“We both worked all our lives,” she said with understandable frustration.
After showing her how the percentage worked based on their different benefit amounts, the light of understanding dawned.
“So it’s like getting the same percentage raise on different salaries,” she concluded perfectly.
The $598 figure that’s been circulating would only apply to someone receiving precisely $19,933 annually in benefits (if the COLA were 3%).
For most beneficiaries, the actual dollar amount will be either higher or lower.
Recent COLA History and What It Means for You
Looking at recent history provides helpful context.
In 2022, beneficiaries received a substantial 5.9% COLA, followed by an even larger 8.7% increase in 2023.
These unusually high adjustments reflected the significant inflation that occurred during those periods.
I remember sitting with retired couples during those announcements, watching mixed emotions play across their faces.
Relief at the larger checks was tempered by the knowledge that prices for everything from groceries to medications had climbed dramatically.
“It’s like running faster just to stay in the same place,” one gentleman told me with a wry smile.
The 2024 adjustment returned to more modest levels at 3.2%, reflecting the cooling inflation environment.
For 2025, early projections suggest a COLA between 2.5% and 3.0%, though the official announcement won’t come until October 2024.
These fluctuations demonstrate why focusing on a specific dollar amount like $598 misses the bigger picture of how COLA works with your unique benefit situation.
The Actual Impact on Different Beneficiary Groups
Social Security serves diverse populations, each affected differently by COLA adjustments:
Retirees: The average retirement benefit in 2024 is approximately $1,900 monthly.
A 3% increase would translate to about $57 more per month for this average recipient – not $598.
Disability Beneficiaries: The average SSDI benefit is lower, around $1,500 monthly.
The same 3% COLA would yield roughly $45 in additional monthly support.
Survivors and Dependents: These beneficiaries often receive lower amounts, meaning their dollar increase would be proportionally smaller as well.
I’ve sat with widows trying to make sense of their benefits after losing a spouse.
The emotional weight of these conversations reminds me how vital accurate information is when people are making crucial financial decisions during vulnerable periods.
Real numbers – not inflated promises – provide the foundation for sound planning.
Why Do These Rumors Persist?
The persistence of COLA rumors reflects several realities:
Wishful Thinking: Many retirees living on fixed incomes naturally hope for substantial increases.
Click-Driven Content: Websites and social media accounts generate more engagement with sensational numbers than with nuanced explanations.
Complexity: The actual calculation methods are complicated enough that simplified (even if incorrect) explanations gain traction.
Information Gaps: Many beneficiaries simply don’t know where to find reliable sources.
My father-in-law, a proud man who worked in manufacturing for forty years, once showed me a printout from a questionable website promising “secret” Social Security increases.
“Is this real?” he asked hopefully.
That conversation sparked a family discussion about information literacy and reliable sources that benefited everyone at the table.
Finding Accurate Information: Sources You Can Trust
Rather than relying on rumors, beneficiaries should consult:
The Official SSA Website: www.ssa.gov provides authoritative information about all aspects of Social Security, including COLA announcements.
Your Personal my Social Security Account: Creating an account at ssa.gov/myaccount allows you to see your specific benefit information and receives personalized updates.
AARP and Other Reputable Organizations: These groups provide accessible, fact-checked explanations of benefit changes.
Financial Advisors: Professionals with expertise in retirement planning can help interpret how COLA adjustments affect your overall financial picture.
I volunteered at a senior center last year, helping residents set up their my Social Security accounts.
The look of empowerment on their faces as they accessed their own information rather than relying on rumors was truly rewarding.
“I wish I’d done this years ago,” one woman told me, “instead of believing everything my neighbor tells me!”
Planning Realistically in an Era of Uncertainty
Understanding the reality of COLA adjustments is crucial for sound retirement planning:
Build Inflation Protection: Even with COLA adjustments, Social Security benefits may not fully keep pace with your personal inflation rate.
Diversify Income Sources: Relying solely on Social Security leaves you vulnerable to policy changes and economic fluctuations.
Budget Based on Announcements, Not Rumors: Wait for official SSA announcements before adjusting your spending plans.
Consider Delaying Benefits: For those still approaching retirement age, remember that delaying Social Security increases not only your initial benefit but also the absolute value of future COLA adjustments.
I recall a pre-retirement workshop I conducted where a participant shared that she had already mentally spent her “big COLA increase” on home repairs.
After our discussion about realistic expectations, she decided to recalibrate her plans based on more accurate projections.
That kind of adjustment, while sometimes disappointing in the short term, prevents much greater disappointment later.
The Human Side of Benefit Adjustments
Behind the numbers and calculations are real people trying to maintain dignity and independence in retirement.
My grandmother lived on Social Security for nearly thirty years after my grandfather passed away.
Each COLA announcement became a family discussion about how it would affect her budget for the coming year.
Those conversations taught me that benefit adjustments aren’t abstract economic policies – they’re deeply personal matters that affect daily decisions about healthcare, housing, and even small pleasures that make life worthwhile.
When she could afford to treat her great-grandchildren to ice cream after a COLA increase, the joy on her face revealed what these adjustments really mean beyond the numbers.
Looking Forward: What Retirees Can Actually Expect
As we look ahead to future announcements, retirees should:
Expect Modest Adjustments: With inflation cooling, COLAs will likely return to more historical averages of 2-3% annually.
Watch the Official Announcement: The SSA typically announces the next year’s COLA in mid-October.
Calculate Your Personal Increase: Apply the announced percentage to your specific benefit amount for an accurate picture.
Consider Broader Economic Trends: COLA is just one factor in your financial security; broader economic conditions matter too.
During community workshops, I often ask participants to write down their current benefit, then calculate different percentage increases to see the actual dollar impact.
This simple exercise has helped countless people move from abstract percentages to concrete budget numbers they can plan around.
Beyond the Rumors to Financial Reality
The $598 COLA rumor, like many similar claims before it, distorts the reality of how Social Security adjustments actually work.
Understanding that COLA is a percentage applied to your specific benefit amount – not a universal dollar increase – empowers you to plan more effectively.
While the prospect of a dramatic increase is certainly appealing, building your financial future on accurate information rather than wishful thinking ultimately serves you better.
Social Security remains a vital program for millions of Americans, providing essential income security through retirement, disability, or the loss of a family breadwinner.
The program’s complexities, including how COLAs are calculated and applied, deserve careful attention rather than simplified rumors.
Next time you see a headline promising a specific dollar amount increase, remember Mrs. Johnson’s insight: “It’s like getting the same percentage raise on different salaries.”
Then check your personal my Social Security account or the official SSA announcement for the information that actually applies to your situation.
Your financial security is too important to leave to rumor mills.
