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To calculate the COLA, the Social Security Administration compares the average price index for July, August and September with the price index for the same three months in the previous year. The price index for September — the final piece of the puzzle — was released Tuesday.

If consumer prices increase from year to year, Social Security recipients automatically get higher payments, starting the following January. If prices drop, the payments stay the same, as they did in 2010 and 2011.

Since 1975, the annual COLA has averaged 4.2 percent. Only five times has it been below 2 percent, including the two times it was zero. Before 1975, it took an act of Congress to increase Social Security payments.

Most older Americans rely on Social Security for a majority of their incomes, according to the Social Security Administration. Over the past decade, the COLA has helped increase incomes for seniors, even as incomes have dropped for younger workers.

From 2001 to 2011, the median income for all U.S. households fell by 6.6 percent, when inflation was taken into account, according to census data. But the median income for households headed by someone 65 or older rose by 13 percent.

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Associated Press reporter Christopher S. Rugaber contributed to this report.