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When you’re working, every year or so, you tend to get pay raises from your employers. When you’re retired, you’re forced to give yourself a raise to help combat rising inflation and prices. Unfortunately, for those retirees or those workers about to enter retirement, the raise they are getting is hardly worth noticing. That’s because one of the main income sources in retirement – social security – says there’s no inflation.

(Dividend.com’s How to Retire section has all the analysis you need to know about living a happy and financially secure retirement.)

Dubbed the cost-of-living adjustment or COLA, this increase in monthly benefits is designed to help the elderly and the poor keep up with the rising standard of living. The problem is that the formula designed to calculate that COLA has been muted at best.

This is in spite of the fact that food, clothing, energy, insurance and healthcare have actually gone up in the last few months.

For those relying on social security, the lack of an adjustment is a hard bill to swallow. For those with the luxury of having investments, there are ways to get around the smaller can of COLA next year.

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