Each year, the amount received by beneficiaries of the Social Security program undergoes an adjustment in order to account for the effects of inflation. This is known as the Cost Of Living Adjustment, or the COLA. Due to the vulnerable nature of the recipients of Social Security benefits, it is imperative that the monthly benefit amount received by the individuals retains its buying power in the face of inflation.
The annual Cost of Living Adjustment for Social Security benefits is calculated using inflation data from the third quarter of the year as compared to the third quarter inflation data of the previous year. If there is an increase, this figure becomes the COLA for the upcoming year. The COLA is announced in October and early predictions and estimates for the 2026 COLA are currently standing somewhere between 2.6% and 2.7% based on inflation data from recent months. For 2025, the COLA was 2.5%.
Benefit amounts for 2026 might also have an additional “Trump Bump” bringing the total increase a little bit higher than current estimates. This is due to the effects of the tariffs policies imposed by President Donald Trump earlier in the year. Here is what you need to know.
Social Security COLA for 2026
The annual COLA announcement is an update that millions of retirees anxiously await each year as even the smallest increase could make a world of difference. According to twenty-four years worth of surveys conducted by Gallup to gauge the importance of Social Security benefits, “consistently, 80% to 90% of respondents — including 86% in April 2025 — noted that their Social Security income was necessary, to some degree, to cover their expenses.”
The specific inflation data that is used to determined the COLA each year is the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) which is released by the Bureau of Labor Statistics. The third quarter (July, August, and September) CPI-W data of the current is measured against the CPI-W data of the third quarter of the previous year. Any increase becomes the COLA for the upcoming year, whilst any decreases or if there is no change results in a COLA of 0%.
The CPI-W has been used as a measure of inflation to calculate the COLA since 1975 and this process has since been automatic. Prior to this, any Cost Of Living Adjustment for Social Security benefits were made at random by means of special sessions at Congress. As such, between the years 1940 and 1974, there had only been a total of eleven COLAs implemented. The smallest COLA on record currently is the 2017 COLA which came in at 0.3%. The years 2010, 2011, and 2016 were the only years since 1975 where the COLA was 0% due to deflation.
What is this “Trump Bump” all about?
Over the last few years, the COLA has fluctuated quite drastically. In 2022, the COLA was 5.9%, following this in 2023, the COLA jumped all the way to 8.7% which was the highest COLA over a 41 year period. The 2024 COLA then came in at a much lower 3.2%, and finally the current year’s COLA came in at 2.5% for 2025.
Over the past 16 years, beneficiaries have received on average a 2.3% boost to their benefits, however, 2026 might just bring with it an even higher boost. Early estimates from The Senior Citizen’s League (TSCL) projected a 2.1% COLA for 2026. These estimates have since increased and aside from recent CPI-W data, this change can be attributed to the effects of President Trump’s tariff and trade policies that had been implemented earlier this year.
Now, taking both June’s CPI-W data as well as the effects of Trump’s tariffs and trade policies, both the TSCL and independent Social Security and Medicare policy analyst Mary Johnson, have estimated that the COLA for 2026 will be 2.6% and 2.7% respectively.
These figures are not yet concrete, however, as the third quarter CPI-W data will only be available in October and as such, these figures could still change depending on the state of inflation over the course of the next two or so months. Subsequently, the COLA for 2026 will be officially announced on or around October 15th.