Understanding Social Security COLA

No, You Can’t drink it, and here's why it matters!

While it may sound like a soda from some future dystopia, Social Security COLA stands for a yearly cost-of-living adjustment that ensures that your Social Security check keeps up with inflation. Think of it as a money life jacket. It helps keep your purchasing power afloat as prices rise fast. Without it, rising costs for food, housing, and health care would reduce the value of your monthly Social Security check.

Notably, this is important news for Floridians. Florida has one of the highest shares of residents age 65 and older. According to U.S. Census data, Florida ranks second in the country, behind Maine. The number of Social Security beneficiaries in the state clocks in at 5.17 million, according to the Social Security Administration, which means that the recently announced Social Security Cost of Living adjustments affect 22.1% of the state population.

Florida is also experiencing rapidly rising prices, including in major metro areas like Miami. According to a Miami Herald Report, “Miami scored above both New York and Los Angeles on the Bureau of Economic Analysis’ cost-of-living index for 2024, making it the priciest of the nation’s 10 largest metros and second only to San Francisco overall.” Miami isn’t the only Florida metro experiencing rapid COLA increases. According to the U.S. Bureau of Labor Statistics, consumer prices across the state of Florida have increased by 37% since 2019.

Another contributing factor to the rise in the cost of living is insurance rates. On average, Florida homeowners spend between $9,000 and $13,000 a year on home/renters, auto, and personal health insurance. Working with an insurance agent can help you align your financial goals with the right coverage for your individual needs.