The 20 Smallest Social Security COLAs in History

Social Security benefits are one of the most important income sources for retirees for many reasons.

These benefits are earned throughout your career, replace around 40% of pre-retirement income, and help to ensure you have the funds that you need to support yourself throughout retirement. While Social Security by itself is not enough to live on, it is guaranteed to provide benefits throughout your lifetime and to increase over time to keep pace with inflation, both of which set it apart from savings.

Those increases to keep pace with inflation are called Cost of Living Adjustments or COLAs. COLAs are periodic raises made available when a financial index reveals that costs are going up. COLAs aren’t always very generous, though. In fact, there have been a number of very small COLAs over the years. Let’s take a look at the 20 smallest so you can see just how little retirees sometimes get.  These are based on Social Security’s data.

20. 1995: 2.6% COLA

While the 1970s and 1980s were marked by high Cost of Living Adjustments thanks to massive inflation, the 90s were a different decade. COLAs were relatively small for much of this time, with retirees typically seeing raises somewhere in the 2% to 3% range most years.

Since the Federal Reserve’s target inflation rate is 2%, prices were going up by around the expected amount during this period in American history.

19. 1993: 2.6% COLA

The 2.6% COLA in 1993 was the lowest annual benefits increase since 1986, and followed several years when COLAs hovered in the 4% to 5% range. While retirees may have been disappointed to see a small COLA this year, lower benefit increases are actually a good thing because big raises only happen when inflation surges. As a general matter, inflation is not a good thing for seniors who likely also have investments and savings.

18. 1999: 2.5% COLA

This was another year in the 1990s when COLAs were pretty steady. The 1990s were simply not a very turbulent time in terms of inflation, and retirees saw slow but steady increases to their benefits as prices went up gradually over time.

17. 2024 2.5% COLA

The 2024 COLA was an interesting one because it was the first time in the post-COVID era that the annual benefits increase was below 3.00%. While the COLA was smaller in 2020, the years following COVID were marked by very high levels of inflation due to stimulus spending and disruption to the supply chain because of the pandemic. The 2022 COLA, for example, was a shocking 8.7% which was one of the highest in decades.

16. 2007: 2.3% COLA

The 2007 COLA was one of the last “normal” COLAs in the expected 2% to 3% range that would occur for years. That’s because, as most people know, the economy experienced tremendous turbulence in 2008 when the housing market collapsed.

15. 1997: 2.1% COLA

This COLA in the mid-1990s follows the trend of reasonable raises right around the Fed’s target rate of inflation that characterized much of the 1990s.

14. 2003: 2.1% COLA

The 2.2% COLA this year was quite a bit higher than the 1.4% raise retirees collected the year prior. Sadly, COLAs have not always been effective at helping seniors to keep up with the real levels of inflation they are experiencing because the COLA formula looks at the spending habits of wage earners and clerical workers to determine if a raise is needed. Seniors tend to spend more than this group in high-inflation categories.

13. 2017: 2.0% COLA

A 2.00% percent COLA shows inflation is right at the target rate. The year 2017 was part of a period of relative steadiness between the 2008 financial crisis and the COVID crisis that was coming down the pipeline.

12. 2012: 1.7% COLA

COLAs that dip under 2% can be a challenge for retirees who often feel that they are hardly getting any benefit increases at all. This year was the start of a long run of low COLAs that left many seniors frustrated with how small their raises were.

11. 2014: 1.7% COLA

The mid-2000s were a hard period for seniors used to large COLAs, as annual raises stayed below 2.00% for many years during this decade.

10. 2019: 1.6% COLA

While both 2019 and 2020 had COLAs at the low end, Cost of Living Adjustments would soon rise sharply. However, the high levels of inflation in the post-pandemic era that resulted in these big raises were actually a disaster for seniors living on a fixed income.

9. 2013: 1.5% COLA

A 1.5% COLA in 2013 didn’t do much to change retirees’ finances. A senior who was receiving a benefit of, say, $1,500 per month would end up with a raise worth just $22.50 per month.

8. 2002: 1.4% COLA

The 1.4% COLA in 2002 was lower than the 2.6% from the year prior, and meant many retirees likely felt they gained no ground and perhaps even lost it because their benefit increase was so small.

7. 1986: 1.3% COLA

This small COLA in the 1980s was very unusual, as this was the only cost-of-living adjustment in the 1980s that was below 2.00%.

6. 1998: 1.3% COLA

It had been over a decade since the COLA was this low, so retirees were likely very disappointed to see their small benefit increase this year.

5. 2020: 1.3% COLA

This COLA was the last small one before several years of large Cost of Living Adjustments resulting from COVID-19-related inflation.

4. 2016: 0.3% COLA

A 0.3% COLA means retirees saw only tiny increases to their checks. Still, this was better than the raise retirees would get in the coming years.

3. 2009: 0.0% COLA

This year was the first time that retirees did not get a benefits increase. Although some of the COLAs had been small in the best, they had not been $0.

2. 2010: 0.0% COLA

This was the second of two bad years for seniors in which no benefits increase at all occurred. These were unusual years in the aftermath of the 2008 financial crisis.

1. 2015: 0.0% COLA

Finally, 2015 was the third and final time, so far, that retirees received a $0 COLA.

Regardless of the size of the COLA, retirees must be certain they are not overspending. Social Security usually makes up only part of their income, so seniors may want to work with a financial advisor to create a comprehensive plan for how to budget and how much to withdraw from their investments. This will help retirees build a more secure future, even if COLAs are not as large as retirees would prefer them to be in some years.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.