Earlier in the year, when things looked pretty bleak on the COVID-19 front, President Trump hoped the spread of the virus would wane during the summer months, which is what typically happens with the flu and other viruses that are more rampant during the winter. But clearly, that hasn't happened. In fact, it's fair to say that the COVID-19 outbreak has only gotten worse during the summer, and while some states are tightening restrictions in an effort to slow its spread, we're nowhere close to the lockdown conditions much of the public endured earlier on in the year.

Throw in the fact that in-person learning is about to kick off in schools throughout the country, and there's certainly reason to worry that the COVID-19 outbreak is heading for a dangerous trajectory. And while that certainly spells trouble from a public health perspective, it's also problematic for seniors on Social Security.

Why a worsening outbreak could be harmful to Social Security

Each year, Social Security benefits are eligible for a cost-of-living adjustment (COLA), the purpose of which is to enable seniors to retain their buying power as inflation makes life more expensive. But COLAs are not guaranteed. In the recent past, we've had several years without a COLA. And if the COVID-19 outbreak continues to spread, seniors might not see a COLA for 2021.

Close-up of older man looking out window.

Image source: Getty Images.

COLAs are calculated based on third-quarter changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). If the CPI-W indicates an increase in the cost of consumer goods for July, August, and September, seniors could be in line for a raise come 2021. If there's no increase, or if there's a decrease, Social Security benefits will stay where they are today. (Thankfully, benefits can't go down from year to year; the worst that can happen is that they remain stagnant.)

But chances are that spending will wane if the COVID-19 outbreak forces more people to stay home and businesses are forced to close. Throw in job insecurity, and people might seriously start to curb their spending, leading to a decrease in demand. And when demand goes down, so do prices, which means if the outbreak continues the way it's been, the CPI-W won't move in the direction seniors need it to in order to snag a raise.

Of course, a Social Security raise isn't the only reason to hope that the COVID-19 outbreak slows down. But seniors who are struggling financially could be in for a rough year ahead if their benefits don't get at least a modest boost, so that's yet another reason to keep our fingers crossed that things on the COVID-19 front start to improve very soon.

In the meantime, Social Security beneficiaries who are in a financial position to cut back on spending should consider doing so in case there's no raise to look forward to in 2021. The silver lining is that the pandemic has forced lots of seniors to stay close to home, so there's been some forced savings at play, even if the reason for it is far from ideal.