We are just about a month away from the next Social Security COLA increase announcement and anticipation is likely growing for beneficiaries of the Social Security program. Based on the latest projections from experts determined with the data available to date, it seems that the 2026 COLA, or Cost of Living Adjustment, will likely come in slightly higher than the COLA for 2025 which provided seniors with a modest 2.5% increase.
The estimates for the 2026 COLA currently stands at 2.7%, however, these are only estimates and are still very much subject to change. A particular cause for concern regarding he 2026 COLA is tariffs. Many experts seem to share the opinion that the full impact of the tariffs are still filtering its way down to consumers. This could spell financial trouble for retirees if the COLA is announced before the effects of the tariffs reach consumer prices.
Seniors already appear to be frustrated with their monthly benefit checks, with many claiming that inflation is growing significantly faster than their benefit checks are, according to a recent study conducted by The Senior Citizens League — a nonpartisan senior advocacy group.
How is the annual COLA determined?
The COLA is implemented on a yearly basis with the aim of countering the effects of inflation thereby allowing the average benefit check to retain its buying power. In particular, the SSA takes third quarter CPI-W data as released by the Bureau of Labor Statistics and measures it year over year. If there is an increase from the previous year to the current year, this becomes the next COLA.
TSCL has projected a COLA of 2.7% based on the data available until July which would mean seniors receiving the average benefit amount will see approximately $60 more in their checks in January. The official 2026 COLA announcement will be made by the SSA on October 15th, once the Bureau of Labor Statistics compiles and releases the September data.
Will the COLA increase really suffice for seniors?
According to Mary Johnson, independent analyst and Social Security expert, “the latest inflation trend gives reason to consider the possibility that the COLA number could move up even higher to a 2.8% or above, if inflation heats up in August and September.” Throughout the summer thus far, inflation has remained relatively calm, however according to analysts, “the producer price index and the consumer price index appeared to show conflicting signals in July about inflation. One surged; the other held fairly steady.”
Research by the Federal Reserve Bank of New York has also revealed that “several groups have experienced higher inflation than the national average, including households headed by those aged 55 and older, low-income consumers, as well as many college-educated workers, urban households and people living in the northeastern part of the country.”
Another important factor to consider is the cost of medical care, especially with seniors. The Bureau of Labor Statistics has determined that “people 65 and older devote 13.4% of spending to medical care, while the general population devotes 8%.” These figures further prove that the CPI-W may not be the optimal measure of inflation relative to seniors as it prioritizes the costs of goods and services spent by a vastly younger cohort with differing lifestyles.
Furthermore, the 2025 Medicare Trustees report projects that, “the standard Part B premium is expected to increase from $185 to $206.50 in 2026.” Since Medicare Part B premiums are automatically deducted from the benefit, about a third of the COLA bump (assuming it does come in at the projected 2.7%) will be lost before seniors even see it.
“If health care is increasing faster than overall inflation as it is doing right now, the buying power of older and disabled consumers gets squeezed,” Johnson noted. “Those with savings may need to dip more deeply into their nest egg than anticipated, those without enough savings may go into debt, and those without savings may need to turn to safety net programs.”