Each year without fail since 1975, the Social Security Administration (SSA) makes a very important announcement that reveals exactly how much beneficiaries can expect to receive in their benefit checks in the new year. This is known as the COLA, or Cost of Living Adjustment, announcement and it takes place some time around mid-October, which means that the next COLA announcement is less than a month away.
In essence, the COLA is a year over year measure of inflation. When there is an increase in inflation from one year to the next, all benefit amounts will be increased accordingly as of the new year. The exact figure is determined using a specific subset of the CPI called the Consumer Price Index for Urban Wage Earners and Clerical Workers. or CPI-W, which is released on a monthly basis by the Bureau of Labor Statistics.
Whilst the aim of the COLA is to ensure the average benefit check retains its buying power amidst growing costs, many seniors feel that it falls short — and it looks like the 2026 COLA is going to compound the situation for retirees. Here is everything you need to know.
2026 COLA projections
To calculate the COLA, the CPI-W of the third quarter of the current year is measured against the CPI-W of the same period in the previous year, and if there is an increase, this becomes the next COLA. In 2025, the COLA came in at a modest 2.5% and all benefits were increased accordingly at the beginning of the year. Since the COLA calculation requires the CPI-W for the third quarter of the year, the SSA is only able to make its announcement during October once the relevant data is released.
This, however, does not necessarily mean that seniors will be in for a massive surprise each year. Since the CPI-W is released on a monthly basis, Social Security experts will often share projections for the next COLA with whatever data is available to date. As such, The Senior Citizen’s League has projected a COLA of 2.7% following the release of August data, whilst expert Mary Johnson has placed her estimates at 2.8%. Since there is only one more month’s worth of data awaiting release, it is safe to assume that the official COLA announcement will be close to, if not match, the latest estimates.
As of July, the average benefit checks comes out to around $2,006, and assuming a COLA of 2.7% in 2026, the average retiree will see around $54 more in their checks in January. Unfortunately, this figure may just be only on paper as other expenses are projected to increase in the new year — ultimately causing the COLA to fall short in fulfilling its purpose.
Medicare hike
In June, TSCL released a study that revealed most seniors are feeling frustrated with their benefits, adding that “94 percent said they felt the 2025 COLA of 2.5 percent was too low and that their benefits grow more slowly than inflation.” And whilst seniors are already feeling the brunt of inflation, matters will likely be worsening in the new year due to the Medicare premium hike.
Seniors enrolled in Medicare will know well that the Part B premium is automatically deducted from their benefit checks. According to the Medicare Board of Trustees, the Part B premium is expected to face an increase of around 11.6% in the new year, bringing the total cost of the monthly premium up by $21.50. Assuming the next COLA comes in at the projected 2.7%, a retiree earning the average benefit amount who is also enrolled in the Medicare Part B plan will stand to lose 40% of their COLA increase before their benefit even hits their bank account.
“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,” said TSCL executive director Shannon Benton.