The annual cost-of-living adjustment, or COLA, is based on a measure of inflation that Congress adopted in the 1970s. Since then, it has resulted in annual increases averaging 4.2 percent.
There was no COLA in 2010 or 2011 because inflation was too low. That, however, has been small comfort to the millions of retirees and disabled people who have seen their retirement accounts dwindle and their home values drop during the economic downturn.
