Read our full analysis for a more in-depth look at these trends.
COLA comfort for older consumers?
Older households’ spending has lagged, but the 2027 Social Security cost-of-living adjustment (COLA) could help narrow the gap.
October 2026
Key takeaways
- Older generations' spending growth has lagged other cohorts over the last year in Bank of America aggregated credit and debit card data, despite sizeable wealth gains. This likely partly reflects the highly uneven distribution of wealth among older households, limiting the extent to which rising wealth supports spending across the cohort.
- More recently, stronger consumer spending appears to be primarily a labor-income story. However, older households are less exposed to accelerating wage growth. In addition, large differences in their income sources help explain the considerable variation in spending among this cohort.
- The recently announced 3.6% Social Security cost-of-living adjustment could provide a meaningful boost in 2027. If inflation moderates as expected, benefit increases may outpace price growth, supporting older households' purchasing power and potentially narrowing their spending gap with other generations.
Additional Materials:
Get the latest from Bank of America
Institute delivered right to your inbox.
