Hang out with your grandparents, and they’re always talking about COLA. But they don’t hear so well, so when they ask you to get them their COLA documents, don’t be surprised if they look confused when you hand them a Pepsi.
So yeah...we're talking about older Americans who rely on Social Security and other governmental programs. However, these income streams are affected by inflationary pressures unless the government does something to adjust the value of their payments. Enter the “cost-of-living-adjustment.”
This is an adjustment to social security payments that are tied directly to the Consumer Price Index. The point here is to ensure that income-dependent people don't see the money they rely upon decline in value over time.