Source: Flickr user Rachel Samanyi.

If you're among the 65 million Americans who rely on Social Security, then you may have been unpleasantly surprised when you saw your first 2016 payment and noticed it hadn't gone up. For the third time in 40 years, Social Security benefits did not get an annual raise, leaving those banking on a boost out in the cold. Though Social Security beneficiaries only received a 1.7% cost-of-living-adjustment in 2015, the total lack of a raise this year is a hard pill to swallow for some retirees, particularly those who count on Social Security as a major source of income.

The reason Social Security didn't get a cost-of-living adjustment, or COLA, for 2016 boils down to something known as the Consumer Price Index, or CPI, which measures price changes in consumer goods and services over time. Social Security benefits are supposed to keep up with inflation, so when the CPI indicates a rise in prices, a COLA is made to help beneficiaries maintain their purchasing power. On the other hand, when consumer prices stay flat, or actually go down, Social Security beneficiaries don't get a boost (although, on the bright side, benefits don't decrease).

But have prices really stayed constant (or dropped) for Social Security recipients? There's no question that your missing benefits boost may owe to unusually low fuel costs. Gas prices dropped nearly 30% in the 12-month period from which the most recent CPI data was obtained. The problem, however, is that fuel costs aren't your average retiree's greatest expense. For the most part, healthcare and housing costs trump any other expense during retirement, and without a benefits adjustment, many retirees are bound to have a difficult time keeping up.

To make matters worse, COLAs have already been falling short to begin with. A study by the Senior Citizens League concludes that seniors have lost about 31% of their purchasing power since 2000. And while living expenses for seniors have risen 84% over the past 15 years, COLAs have contributed to just a 41% rise in Social Security payments. The fact that 2016 saw no benefits increase only adds insult to injury.

How to compensate
If that missing Social Security boost is hitting you where it hurts, then it's time to start cutting corners wherever possible. For starters, you may need to downsize if your current home costs too much to maintain, or if you're still carrying a mortgage. You might also consider moving somewhere with a lower cost of living in order to reduce your expenses on the whole. Additionally, if you have the opportunity to relocate to a walkable town or community, doing so can save you thousands of dollars each year on automobile payments, maintenance, and insurance. Finally, if you're eligible for a senior citizen discount, don't be ashamed to use it. When you're living on a fixed income, every penny counts.

If you're a soon-to-be beneficiary
If you're planning on retiring and collecting Social Security benefits within the next few years, this news should serve as a wake-up call. Though you may not have many working years left, there are steps you can take to ensure a more financially secure retirement. As a starting point, don't ever assume that your Social Security benefits will be enough to cover all, or even most of, your living expenses. Social Security is only designed to replace about 40% of your pre-retirement income. Most financial experts believe you'll need roughly 70% of your pre-retirement income to maintain a comfortable lifestyle, so if you're behind on your savings, now's the time to ramp up.

Don't fall into the trap of thinking it's too late, because every little bit helps. Anyone over 50 is allowed to make catch-up contributions for retirement. You can allocate an additional $6,000 a year to your 401(k) and an extra $1,000 to your IRA for a total annual pre-tax contribution of $24,000 and $6,500, respectively. If you're unable to max out your contributions, do what you can. A small cushion is far better than no cushion at all.

Only time will tell whether Social Security benefits go up in the coming year, but if you want to play it smart, assume they won't and adjust your financial plan accordingly. That way, if you do wind up with a few extra dollars in next year's paychecks, you'll have all the more reason to celebrate.