There are millions of Americans who rely on Social Security that could see a slight change in the Cost-of-Living Adjustment (COLA) in 2026, as a new estimate from the Senior Citizens League (TSCL). However, this advocacy is also concerned about the accuracy of the information that is being used to calculate these adjustments as this could potentially affect the financial stability of retirees.
What is COLA and Why It Matters
The Social Security COLA is meant to help beneficiaries keep up with inflation and maintain their purchasing power. The Social Security Administration (SSA) makes adjustments to payments based on inflation data which is provided by the Bureau of Labor Statistics (BLS) every year. Specifically, the adjustment is tied to changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which tracks price fluctuations on everyday goods and services.
This inflation adjustment is not just a technical measure, for the nearly 70 million Americans who rely on Social Security or Supplemental Security Income (SSI), it plays a critical role in maintaining their standard of living.
2026 Forecast: A 2.5% Increase — For Now
Based on current inflation data, TSCL projects a 2.5% COLA for 2026. That’s a slight uptick from last month’s projection of 2.4%. While any increase is welcomed by seniors on fixed incomes, the organization warns that the accuracy of these projections, and the data used to make them, may be in jeopardy.
Data Collection Issues Raise Alarms
This warning comes as there has been reported issues within BLS. The department has been faced with issues such as a pause in hiring staff as well as staff shortages. These challenges have led to a decreased ability to collect inflation information throughout the country. In fact, the agency recently confirmed it had stopped collecting data from Lincoln, Nebraska; Provo, Utah; and Buffalo, New York. It also noted a broader scale-back in data gathering in several other areas.
An email obtained by the Associated Press confirmed that since April, the BLS has had to cut back on the number of retail outlets and price quotes it surveys which was a temporary measure related to current hiring limitations.
Why Incomplete Inflation Data Matters
TSCL warns that reduced or inconsistent data collection could result in an inaccurate CPI, which in turn means an inaccurate COLA.
This isn’t just about government payments. Inflation data is a pillar of the broader economy. It determines the payout of inflation-adjusted Treasury bonds (worth around $2 trillion), influences interest rates, and even affects how private companies set wages.
Shannon Benton, executive director of TSCL, stressed that while streamlining government operations may sound efficient, undercutting essential data collection could have real costs. “Inaccurate or unreliable data in the CPI dramatically increases the likelihood that seniors receive a COLA that’s lower than actual inflation,” she said. “That can cost seniors thousands of dollars over their retirement.”
A Bigger Issue: CPI May Not Reflect Senior Spending
Beyond just the staffing issues, TSCL has consistently pointed out flaws in how the government calculates COLA. They’ve argued for years that the CPI-W doesn’t truly reflect what seniors spend their money on. It tends to underestimate healthcare costs, which make up a big part of retirees’ budgets
According to a 2025 survey by TSCL, the majority of Social Security recipients spend over $1,000 each month on healthcare alone. Many also reported that their personal costs rose by more than 3% over the past year which is a full half-point higher than the COLA estimate based on current CPI-W figures.
What’s Next? Official Numbers Coming in October
Still, the official COLA for 2026 won’t be known until October 2025, when the SSA reviews inflation figures from July through September. The BLS insists that recent cutbacks in data collection won’t seriously affect the overall numbers, though they admit there could be more inconsistency in certain regions or product categories. TSCL is keeping a close eye on the process and pushing for changes that better reflect what seniors actually face. With inflation still squeezing household budgets, older Americans are watching these decisions more closely than ever.