Each year, millions of seniors who rely on Social Security for much of their income eagerly await a cost-of-living adjustment, or COLA, to their benefits. Introduced in the mid-1970s, COLAs are designed to help seniors who collect Social Security retain their buying power in the face of inflation.

This year, Social Security recipients got a windfall in the form of a 2.8% COLA -- the highest one in years. That COLA took the average monthly benefit of $1,422 all the way up to $1,461, thereby giving the typical senior an extra $468 a year. That's a big deal to anyone on a fixed income with little financial wiggle room.

But early data paints a very troubling picture for Social Security in 2020 -- namely, that recipients might not see a COLA at all. The Bureau of Labor Statistics just released Consumer Price Index (CPI) data for the last quarter of 2018, which showed that it dropped by 1.8% compared to the last quarter of 2017. The CPI is what the Social Security Administration bases its COLAs on, and while there are still nine months to go until next year's COLA is officially calculated, based on the latest data available today, seniors would get no increase.

Social Security card.


Obviously, that's not the news that seniors who depend on those benefits want to hear. If you're one of them, consider this your wake-up call to prepare accordingly.

Don't bank on a raise next year

While initial CPI data paints a rather ominous picture for Social Security in 2020, the fact of the matter is that it's too soon to tell what next year's COLA will look like. But even if a COLA does come through, there's a good chance it won't make much of a difference for seniors who are currently straddling the poverty line and barely hanging on.

If you've been struggling to keep up with your senior living expenses and get most or all of your income from Social Security, you'll need to take matters into your own hands rather than bank on a COLA that might not come through. You can start by cutting some expenses in your budget to free up cash. If you're mostly living on Social Security, you've probably adopted a fairly frugal lifestyle to begin with, but that doesn't mean there aren't small changes you can make, whether it's unloading a vehicle you can do without or canceling the cable plan you hardly take advantage of.

Additionally, if you're capable of working in some capacity, it pays to look into getting a part-time job. Working a few hours per week is a guaranteed way to boost your retirement income, and you can bet that however much you earn, it'll be more than what a Social Security COLA would give you. That said, you don't have to subject yourself to a job you're apt to hate. You can start a business, monetize a hobby, or consult in your former field if you enjoyed your previous line of work.

Whether Social Security will get a COLA in 2020 is yet to be determined. Seniors who bank on those benefits will clearly be hoping for the best over the next nine months, but all the while, they'll need to prepare for the worst.