Flat-rate COLA reduces Social Security benefits

A proposed flat-rate cost-of-living adjustment (COLA) for Social Security benefits would provide equal increases to all recipients based on the 20th percentile, potentially eroding benefits for the majority of beneficiaries. Critics, including AARP, warn that this approach would reduce purchasing power for 80% of beneficiaries, especially as they age, and could lead to increased financial hardship. The current system ties COLAs to inflation measures, aiming to preserve benefits, while alternatives like raising payroll tax caps are suggested to strengthen the program.

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