IIRC, there's no COLA available anymore on annuities...is that really the case?
Maybe TIPS could compensate?
My understanding is that there are some COLA annuities out there but they are pretty rare and costly.
However, if you're willing to accept a fixed percentage increase you could roll your own by combining a SPIA with a series of deferred annuities.
For example, say that you want income of $3,000/month adjusted for inflation and that you expect inflation to be 3% a year.
You could buy an SPIA that pays $3,230* for life plus a 5-year deferred annuity that pays $514** for life plus a 10-year deferred annuity that pays $597** for life, et al. The deferrd annuities effectively increase your benefits a fixed 3%/annually every 5 years.
*$3,000*(1+3%)^2.5
**$3,000*(1+3%)^7.5 - $3,000*(1+3%)^2.5
***$3,000*(1+3%)^12.5 - $3,000*(1+3%)^7.5 - $3,000*(1+3%)^2.5
You would receive $3,230/mo for the first 5 years, $3,744/mo for the next 5 years and $4,341/mo and those cash flows would broadly approximate a 3%/year increase in the cash flow starting with $3,000/month.
If you really wanted to be anal about it you might buy a $3,000 /mo SPIA + a 1-year deferred annuity that pays $90/yr + a 2-year deferred annuity that pays $93/mo + a 3-year deferred annuity that pays $95/mo.... etc. Put it all together and you would have cash flows that increase 3%/year.
However, there might be some minimum premium that would mess up doing something like this that you would have to work around by having the increases being every 5 years or 10 years or some other increment.