Tens of millions of vulnerable Americans rely on their monthly Social Security income to cover their basic living expenses. The vast majority of beneficiaries depend, at least partially, on these monthly benefits to pay their bills, and for some, Social Security represents their primary source of income. According to recent estimates from The Senior Citizens League (TSCL), a nonpartisan advocacy group, “21.8 million seniors get by on Social Security alone.”
Since Social Security benefits are fixed incomes, even a small increase in the cost of goods or services due to inflation can place additional financial strain on beneficiaries’ households. To help maintain at least some of their purchasing power in the face of inflation, Social Security benefits receive an annual Cost of Living Adjustment. This Cost of Living Adjustment, commonly referred to as COLA, is announced each October by the Social Security Administration (SSA).
The rate of inflation for the current quarter will determine the COLA for 2026. Here’s what you should know.
What is the Social Security COLA?
As each year progresses, various groups begin releasing estimates of what the next COLA could be, providing those on fixed incomes with an approximate idea of what to expect. These estimates, of course, are subject to change because inflation can be unpredictable. The COLA is calculated based on year-over-year inflation data for the third quarter, as provided by the Bureau of Labor Statistics. Specifically, the third quarter’s Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) data of the current year is compared against the same quarter from the previous year. If there is an increase from one year to the next, this figure determines the new COLA. If inflation decreases, the COLA is set at 0%.
For 2025, the COLA was 2.5%, meaning benefits increased by 2.5% starting in January. The COLA for 2026 will be officially announced by the SSA on October 15, once third-quarter CPI-W data (covering July, August, and September) is available.
2026 COLA projections
In June, The Senior Citizens League projected a 2.5% COLA for 2026 based on May’s CPI-W data. The advocacy group has since updated its estimate to 2.6%, slightly higher than this year’s COLA. Additionally, independent Social Security and Medicare policy analyst Mary Johnson provided an estimate of 2.7%.
If current inflation rates remain steady through this quarter, seniors may see a COLA similar to this year’s in 2026. However, many retirees express concerns that these modest increases don’t adequately match the true rise in their living costs. According to a recent TSCL study, “When TSCL asked seniors how much they thought inflation was in 2024 based on their personal economic experiences, 80 percent thought inflation was 3 percent or higher.”
At first glance, a higher COLA might seem beneficial, but it represents something of a double-edged sword. An increased COLA typically indicates higher prices for goods and services. Part of the problem lies in the method used to measure inflation, which many argue inaccurately reflects seniors’ real expenses. The CPI-W measures data primarily from a younger demographic with significantly different expenses and needs. According to TSCL’s study, “The most popular option, supported by 68 percent of seniors, was calculating the COLA with an inflation index that better represents seniors’ economic experiences. The government currently calculates the COLA using the Consumer Price Index for Urban Wage Earners, but TSCL advocates switching to the Consumer Price Index for the Elderly.”
TSCL Executive Director Shannon Benton emphasizes, “The data in this study confirms what seniors have been telling TSCL for years: Social Security checks aren’t keeping pace with inflation. If four in five seniors believe inflation was higher than officially reported in 2024, perhaps it’s time we stop questioning their experiences and start questioning why the COLA measurement continues to fall short.”