After a modest 2.5% Cost-of-Living Adjustment (COLA) in 2025, seniors are bracing for a potentially lower increase in their 2026 Social Security benefits. Early projections suggest a COLA of just 2.3%, which could leave millions of retirees struggling to keep up with rising expenses, especially in critical areas like healthcare and housing.

What Is the 2026 Social Security COLA?

Each year, the Social Security Administration (SSA) announces a COLA to help Social Security benefits keep pace with inflation. This adjustment is based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter (July through September) of the previous year.

For 2026, the Senior Citizens League (TSCL) projects a 2.3% COLA, down from 2025’s 2.5%. Although still a positive adjustment, it falls below the 20-year average of 2.6%, highlighting a concerning trend for seniors on fixed incomes.

What’s Driving the Lower COLA Forecast?

One major factor influencing the projected reduction is a recent cooling in inflation. The Consumer Price Index (CPI) dropped by 0.1% in March 2025, marking the first decline in inflation since 2020. While that may seem like good news for consumers, it directly impacts the COLA calculation by reducing the perceived need for a higher adjustment.

Additionally, economic uncertainty and market volatility are complicating factors. Seniors often depend not only on Social Security but also on investments and savings, which are more vulnerable in turbulent market conditions. As the cost of living continues to climb, particularly in health and housing, a minimal COLA might not reflect seniors’ real-world expenses.

Tariffs and Inflation: A Hidden Factor

Experts warn that new tariff policies could increase the prices of imported goods, including prescription drugs and medical supplies. If these tariffs lead to a spike in inflation later in 2025, the final COLA figure announced in October could be revised (source).

Are COLA Calculations Fair to Seniors?

Many advocates argue that the current CPI-W method doesn’t accurately reflect how seniors spend their money. Seniors typically spend a larger portion of their income on healthcare, prescriptions, and rent—items that may not rise at the same rate as other goods in the CPI-W.

This has led to renewed calls for using the Consumer Price Index for the Elderly (CPI-E) instead. The CPI-E focuses on spending patterns specific to seniors and might result in slightly higher COLAs. Some lawmakers support the shift to CPI-E, but legislation has yet to pass.

More information on how COLAs are calculated is available on the official SSA website.

When Will the 2026 COLA Be Finalized?

The SSA is expected to officially announce the 2026 COLA in October 2025, after reviewing third-quarter inflation data. If the current 2.3% projection holds, the average retiree receiving $1,900 per month would see a monthly increase of about $43.70. These adjustments would take effect in January 2026.

Mixed Reactions from Seniors and Experts

While any increase is welcome, many retirees feel that a 2.3% bump simply isn’t enough to cover the growing costs of living. Inflation in essential categories, like groceries and Medicare premiums, often outpaces the general inflation rate measured by CPI-W. This creates a widening gap between benefits and real-life expenses.

“The COLA formula is outdated and leaves too many seniors behind,” said a spokesperson from TSCL. “We urge lawmakers to adopt a more accurate model like the CPI-E.”

What’s Next for Social Security Beneficiaries?

Although a lower COLA may disappoint many, retirees should begin reviewing their financial plans now to prepare for a potentially smaller increase. Additional government benefits, such as Supplemental Security Income (SSI) or Medicare Extra Help, may provide some relief. You can check eligibility at benefits.gov.

In the meantime, advocates continue to push for reforms that better address the economic realities of retired Americans.

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