Following the Bureau of Labor Statistics’ release of September data on October 15th, the Social Security Administration (SSA) will announce the COLA increase for the upcoming year. The COLA, or Cost of Living Adjustment, is an increase implemented to all Social Security benefit amounts once a year so as to counter the effects of year over year inflation hikes.
For 2025, the COLA came in at a modest 2.5%, however, projections for the next COLA are currently standing a little bit higher at 2.7%. The official 2026 COLA figure will only be determined once the relevant CPI data becomes available and as such, this figure could very well jump up higher. Unfortunately, even if retirees see a COLA higher than this year’s in 2026, its effect may still fall short in retaining the buying power of the average benefit check.
CPI-W vs. CPI-E
The COLA is calculated using a particular subset of the CPI called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The CPI-W for the third quarter of the current year is measured against the CPI-W of the third quarter of the previous year and if there is an increase, this becomes the next COLA. If there is no change or a decrease in the CPI-W from the previous year to the current year, the next COLA defaults to 0.0%. This means that your benefit amounts can always increase but they will never decrease due to inflation.
The CPI-W has over 200 pricing categories, each of which weighs in differently in the overall calculation. The issue being raised by senior advocates is that the CPI-W is not as accurate as it could be relative to the costs held by the retiree cohort. This is because the CPI-W considers the cost of a basket of goods and services that would be purchased by an average person who is currently in the workforce and therefore much younger than an average retiree with differing priorities.
As a result, the categories that carry a stronger weight in the CPI-W calculation may not necessarily be categories that carry a strong weight relative to the lifestyle of a senior citizen. Subsequently, The Senior Citizens League (TSCL) — a nonpartisan senior advocacy group — recently stated in a report that it “advocates switching to the Consumer Price Index for the Elderly.”
The findings in TSCL’s report also revealed that 94% of study participants “felt the 2025 COLA of 2.5 percent was too low and that their benefits grow more slowly than inflation.”
“The data in this study shows what seniors have been telling TSCL for years: Social Security checks aren’t keeping up with inflation. If four in five seniors think inflation was higher than the government reported in 2024, maybe we should stop questioning their experiences and start questioning why the COLA is failing to measure them,” TSCL Executive Director Shannon Benton stated in the report.
2.7% estimate for the 2026 COLA — but what about tariffs?
Following the release of July data from the Bureau of Labor Statistics, TSCL updated its projections for the 2026 COLA to 2.7%. This figure matches the estimates previously shared by independent analyst and Social Security expert Mary Johnson. If these estimates hold steady, this will mean a slightly bigger bump to benefit amounts in the new year, however, it may still fall short in sufficiently retaining the buying power of the average benefit check.
“You could make the case that tariffs are likely to drive up inflation more than Social Security COLA actually rises or can cover,” Johnson stated. “Food costs are likely to continue to climb due to several issues other than tariffs, too, including weather, geopolitical disasters, and lack of farm workers. And there is a wild card: There are staff changes at the Bureau of Labor Statistics that could potentially affect the accuracy of consumer data.”
According to a new survey conducted by the Nationwide Retirement Institute’s Social Security, “half of retirees are terrified about the impact of tariffs on their retirement income or savings, and more than 6 in 10 believe rising tariffs will drive inflation beyond what the COLA can cover.”