COLA Glossary: The Terms, in Plain English
Quick answer: Every term that appears in a COLA notice, an SSA letter or this site — defined in one line, with a link to the page that works the numbers. The three that unlock everything else: PIA (the amount the formula produces), CPI-W (the index the COLA is measured from), and combined income (the figure that decides your taxes).
| Term | What it means |
|---|---|
| AIME | Average indexed monthly earnings — your 35 highest years of earnings, each indexed to wage growth, averaged to a monthly figure. The input to the benefit formula. More → |
| Bend points | The two dollar thresholds in the PIA formula where the replacement rate steps down (90% → 32% → 15%). For 2027: $1,340 and $8,077; the family maximum has its own set ($1,712 / $2,471 / $3,223). More → |
| COLA | Cost-of-living adjustment — the automatic annual benefit increase tied to CPI-W inflation, in law at §215(i) of the Social Security Act, paid since 1975. More → |
| COLA notice | The SSA's official statement of your new benefit amount, posted in my Social Security in late November and mailed in December. More → |
| Combined income | The IRS measure (provisional income) that decides benefit taxation: other income + tax-exempt interest + half your benefits. More → |
| CPI-E | The Bureau of Labor Statistics' experimental price index for households 62+, weighting healthcare and housing more heavily; proposed, never adopted, as the COLA index. More → |
| CPI-W | Consumer Price Index for Urban Wage Earners and Clerical Workers — the index the COLA is legally computed from, using third-quarter averages. More → |
| Delayed retirement credits | Increases to your benefit for claiming after full retirement age — 8% per year of delay up to age 70 (for those born 1943+). More → |
| Diet COLA | The reduced FERS formula: when the CPI rise exceeds 3%, FERS annuities get CPI minus 1 point (2.6% for 2027); between 2% and 3% they get 2%; at or below 2%, the full amount. More → |
| Divorced-spouse benefit | A benefit on a former spouse's record, requiring a marriage of at least 10 years; up to 50% of the ex-spouse's PIA. More → |
| Dual entitlement | Being entitled to two benefits at once (e.g., your own retirement plus a spousal benefit): you are paid your own first, plus any excess of the other. More → |
| Earnings test | The rule that withholds benefits before full retirement age when earnings exceed annual limits — $25,560 / $67,920 for 2027. More → |
| Essential person | A legacy SSI category: an additional payment (half the individual rate) when a medically or administratively essential person lives with the recipient. Closed to new cases since the 1970s. More → |
| Family maximum | The cap on the total benefits payable on one worker's record, computed from 2027 bend points of $1,712 / $2,471 / $3,223. More → |
| FBR (federal benefit rate) | The maximum federal SSI payment standard: $1,029 (individual) and $1,544 (couple) for 2027. More → |
| FRA (full retirement age) | The age at which you receive 100% of your PIA: 66 for birth years 1943–1954, rising to 67 for 1960 and later. More → |
| GPO / WEP | Government Pension Offset and Windfall Elimination Provision — former reductions for people with non-covered pensions, repealed by the Social Security Fairness Act (January 2025). More → |
| Hold harmless | The rule capping a Part B premium increase at the dollar amount of your COLA raise, so your net check cannot fall because of the premium. More → |
| IRMAA | Income-related monthly adjustment amount — the surcharge higher-income beneficiaries pay on Part B (and Part D) premiums, set by MAGI from two years earlier. More → |
| MAGI | Modified adjusted gross income — for Medicare purposes, your AGI plus tax-exempt interest; the figure IRMAA tiers are read from. More → |
| my Social Security | The SSA's online account system; where your COLA notice, benefit statement and payment history live. More → |
| PIA | Primary insurance amount — your basic benefit at full retirement age, produced by the formula from your AIME. Every related benefit (spousal, survivors, family) is a percentage of it, and the COLA is applied to it. More → |
| Quarter of coverage | A work credit: earned per $1,970 of covered earnings in 2027, up to 4 a year; 40 are generally needed for retirement benefits. More → |
| SGA | Substantial gainful activity — the earnings level that defines disability work capacity: $1,770/month in 2027 ($2,950 if blind). More → |
| Spousal benefit | A benefit on a spouse's record, up to 50% of the worker's PIA at the spouse's full retirement age (as low as 32.5% at 62). More → |
| SSI | Supplemental Security Income — the needs-based federal payment program for aged, blind and disabled people with limited income and resources, administered by the SSA but not paid from the trust funds. More → |
| SSDI | Social Security Disability Insurance — benefits on your own work record if you become disabled; average benefit $1,642 → $1,701 in 2027. More → |
| Survivors benefits | Benefits on a deceased worker's record for widow(er)s, children and dependent parents; an aged widow(er) averages $1,936 → $2,005 in 2027. More → |
| Taxable wage base | The maximum earnings subject to the Social Security payroll tax and counted toward benefits: $192,300 in 2027. More → |
| Tier I / Tier II | The two railroad retirement components: Tier I mirrors Social Security (COLA 3.6% for 2027); Tier II is the industry-pension layer (COLA = 32.5% of the CPI rise, 1.2% for 2027). More → |
| Trial work period | The SSDI provision letting beneficiaries test work for 9 months without losing benefits; a month counts toward it at earnings over $1,270 in 2027. More → |
Where to go next
New to the topic entirely? What is COLA? routes you by what you need. Looking for a specific answer instead of a definition? The COLA FAQ collects 40+ questions with short answers and links.
Definitions follow SSA, IRS, CMS, BLS and OPM usage as of the 2027 COLA cycle; dollar figures shown are the 2027 values announced October 14, 2026.