July is crucial for Social Security recipients, and what happens in this month could impact your 2026 benefits. Most importantly, July is the start of a three-month period that determines the cost-of-living adjustments (COLA) for next year. The data collected this month will play a major role in deciding additional benefits that recipients could get next year.
Why July Is Crucial for Social Security Recipients
Every year, Social Security recipients get a COLA that enables their benefits to keep up with the rising cost of living. This annual increase is based on inflation rates that are tracked through the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). To calculate COLA for the following year, the Social Security Administration (SSA) uses the average CPI-W data from the third quarter, which includes the months of July, August, and September.
July is the first month in the calculation and therefore any inflation trend that begins this month will set the tone for 2026’s COLA.
How 2026’s COLA is Shaping Up So Far
So far, the Senior Citizens League estimates that the 2026 COLA could be 2.5%, just like that of 2025. That projection is based on inflation trends from the first half of the year. However, a lot can happen within the next few months.
For instance, there are new tariffs and global supply issues that could cause inflation to spike, or prices to rise, which could result in a higher COLA next year. Additionally, if inflation remains stable or even drops, the 2.5% projection could hold or drop slightly.
It is essential to note that Social Security benefits cannot go down from year to year because there is no negative COLA. The worst-case scenario is that benefits remain flat. Given the economic outlook in 2025, an increase in COLA is highly likely.
When Will the Official COLA Be Announced?
The Social Security Administration will announce the official 2026 COLA figure in October 2025, because it must wait for the full third-quarter CPI-W data to be collected and averaged. Until then, all figures are just estimates based on current trends.
It is therefore essential to pay attention to economic news this month, especially if you rely heavily on Social Security as a source of income.
What You Can Do Right Now
As you wait for the final COLA to be announced in October, here are things you can do to prepare, especially if Social Security is your main source of income:
- Review your expenses.- Review your monthly spending and see if you can cut back to be able to save more.
- Consider part-time work. – If possible, you can rejoin the workforce as a part-time worker to boost your income. Social Security recipients can work while receiving benefits; however, you should be aware of income limits if you haven’t reached full retirement age (FRA).
- Monitor inflation trends. – It is crucial to stay informed on inflation and economic trends, because if inflation rises, it could point to a higher COLA.
Conclusion
July is not just another summer month; instead, it is a key starting point in deciding the COLA to expect in 2026 and the increases in monthly payments that Social Security recipients will get in 2026. So far, a potential 2.5% 2026 COLA is on the table, and as inflation continues to shift, what happens this July matters a lot.
While officials wait for the end of the third quarter to calculate the 2026 COLA, the financial decisions you make today could help you prepare for the future, no matter what the final COLA will be. If you rely on Social Security as the main source of income, it is crucial for you to adjust your spending, start to save more, monitor inflation closely, and look for ways to supplement your income, for example, by seeking a part-time job.