Each passing day of September brings us one day closer to the next COLA announcement, making this a highly anticipated time of year for Social Security beneficiaries. Based off early predications for the next COLA as shared by field experts, it looks like seniors are shaping up to receive a slightly higher COLA in 2026 than they did in 2025. This, however, is not necessarily the good news it appears to be at first glance.
The COLA, or Cost of Living Adjustment, is an increase implemented to all benefit amounts once a year in order to account for the effects of inflation. This means that, while a higher COLA translates into a bigger check in the new year, it also means that the general costs of goods and services are increasing. This is an especially worrying cause for concern as many seniors are already finding that their monthly benefit income does not stretch as far as they need it to.
How is the COLA calculated?
Each year, the SSA determines the COLA by measuring inflation data of the third quarter of the current year against the third quarter of the previous year. If there is an increase, this percentage figure becomes the next COLA and all benefits are increased by that much in January. If there is a year over year decrease, the COLA will merely default to zero, meaning that benefit amounts will remain unchanged in the new year. In short, your benefits will always be subject to an increase due to inflation but it will never be reduced because of a decline in inflation rates.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is the specific subset of the CPI used to determine the annual COLA. The common sentiment amongst both seniors and senior advocacy groups is that the CPI-W is not an accurate measure of costs relative to the the type of lifestyle lived by the average senior. This is because the weighing of the CPI-W’s categories places more importance on costs or services that a vastly younger cohort would require.
Using the CPI data available to date, The Senior Citizens League has estimated that the 2026 COLA will come in at 2.7%, making it a slightly higher increase than the COLA of 2.5% for 2025. The SSA will make the official 2026 COLA announcement on October 15th once the Bureau of Labor Statistics releases the September data.
Will the 2026 COLA fall short?
While the projections for the next COLA are higher than this year’s increase, it may still not be enough to truly combat the effects of inflation so as to allow the average benefit check to retain its buying power. According to the latest report from the Social Security Board of Trustees, “the best-case scenario for 2026 would be a COLA of 3%.”
The fact that the COLA seems to be falling short is further solidified by the findings of a recent TSCL study wherein “94 percent said they felt the 2025 COLA of 2.5 percent was too low and that their benefits grow more slowly than inflation.” The nonpartisan senior advocacy group is also of the opinion that the CPI-W is not the ideal measure of inflation for seniors and “advocates switching to the Consumer Price Index for the Elderly.”
Another growing cause for concern amongst seniors is the matter of tariffs. Now that the hiked tariffs are in effect, many seniors are fearing that their savings and retirement income are going to take a major hit. “More than 6 in 10 believe rising tariffs will drive inflation beyond what the COLA can cover,” according to a Nationwide Retirement Institute’s Social Security survey.
It is worth noting that the tariffs have not yet had any sort of massive impact on inflation rates, however, experts seems to be of the opinion that this is just the calm before the storm, meaning that the effects of the tariffs are still en route.
“Inflation calm is unlikely to last,” Seema Shah, chief global strategist at Principal Asset Management, wrote in response to the latest Bureau of Labor Statistics data. “The late summer and autumn inflation reports, along with business surveys, may reveal further signs of price acceleration, adding to concerns about the inflation outlook.”