What would cause a change in Social Security benefits from year to year?

Cost-of-living adjustments (COLA) due to inflation are specifically designed to help Social Security benefit amounts keep pace with the rising costs of living. Each year, the Social Security Administration evaluates the Consumer Price Index (CPI) to determine whether there has been an increase in prices. If the CPI indicates that inflation has occurred, beneficiaries receive an increase in their Social Security payments. This ensures that the purchasing power of these benefits is not eroded over time, making them more effective in meeting the needs of retirees and disabled individuals.

Changes in the stock market and federal tax rates do not directly alter the amount of Social Security benefits received by individuals. Similarly, while Congress can influence policies related to Social Security, the annual adjustments in benefits based on inflation are a standardized mechanism, distinct from legislative decisions. Therefore, the correct answer highlights the importance of COLA in the regular adjustment of benefits in response to economic changes.