Money & budgets
cost-of-living adjustment
An automatic increase in benefits or wages tied to a price index. Social Security's annual COLA is the largest example in federal law.
In full
Indexing prevents inflation from quietly cutting benefits year after year. Social Security's COLA is set by a specific consumer price index measured over a defined quarter, so the announced figure follows a formula rather than a decision. Which index is used is a live policy question, because alternatives would compound to large differences over decades.
Also written as: COLA
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A plain-language explanation for civic education, not legal advice. When in doubt, the official source named above controls.