Business and Personal Finance Dictionary

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• COST-OF-LIVING ADJUSTMENT (COLA)
  
  COLAs are increases in wages, Social Security, and some pension benefits designed to offset the impact of inflation. They are usually pegged to increases in the consumer price index (CPI). Only a few private pensions provide COLAs, but federal government pensions and Social Security are usually adjusted annually to keep pace with increased living costs.
  
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