Why do US Social Security benefit estimate increases vary so much from year to year?

Question

Although not yet old enough to receive US Social Security benefits I do look at the SSA statements each year. In each statement they provide an estimate of how much I will receive if I choose to start receiving benefits at various ages (e.g., 62, 67, and 70).

According to each yearly statement the estimated amount I would get if I elected to start getting benefits at age 62 goes up. Here is a chart of the increases for the past several years:

2014     2.48%
2015     5.73%
2016     0.90%
2017     4.17%
2018     0.17%
2019     3.54%
2020     3.64%
2021    11.02%
2022     0.24%

My income over this period is quite stable, with only very small increases each year.

The increase in 2018 is practically zero while the increase in 2021 is 11%. Why do the increases vary so much from year to year?

Answer 1

Since 1975, Social Security's general benefit increases have been based on increases in the cost of living, as measured by the Consumer Price Index. We call such increases Cost-Of-Living Adjustments, or COLAs.

Source: https://www.ssa.gov/oact/cola/colasummary.html