What is CoLA and why is it important? The Social Security Cost-of-Living Adjustment (CoLA) is an annual adjustment to help Social Security payments increase as everyday prices rise. When prices for groceries, housing and utilities rise, the same monthly payment buys less. The COLA is intended to help limit that loss of purchasing power.  Around 2033, Social Security will have about 80 percent of the money it needs to make full payments. Congress can address the gap without cuts, including without reducing the annual COLA.  This video is part of a paid partnership with @aarp