Every fall, Social Security recalibrates benefits to reflect inflation through the annual cost-of-living adjustment, or COLA. The calculation itself is mechanical—set by statute and based on a specific inflation gauge—but the stakes are anything but academic for retirees who rely on their monthly checks.
Last October, the Social Security Administration (SSA) announced a 2.5% COLA for 2025, and that increase flowed into benefit payments starting in January. Now attention is turning to 2026. The Senior Citizens League (TSCL), a nonpartisan advocacy group that tracks the data closely, has nudged its 2026 projection to 2.7%, up from an earlier 2.5% estimate, citing the latest inflation readings from the Bureau of Labor Statistics. The official number, as always, will arrive in October.
Social Security Cost of Living Adjustment predictions
To understand why this matters—and why estimates can shift by tenths of a point—you need to know how the COLA is set. By law, SSA looks at the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI‑W) during the third quarter—July, August, and September—and compares that average to the same three months a year earlier.
If the third‑quarter CPI‑W is higher, the percentage difference becomes the next year’s COLA, rounded to the nearest tenth. Because we’re in the heart of the third quarter, the projection band narrows with each monthly report; still, September’s data can move the final figure, sometimes more than people expect.
TSCL’s updated 2.7% reflects a subtle but noticeable firming in price trends compared with earlier in the year, when headline inflation was running under 3%. The group notes that, while the overall inflation backdrop has cooled dramatically from the peaks of 2022, certain categories—insurance, services tied to labor costs, and various fees—remain sticky. It’s also fair to say that policy developments can color the near‑term outlook. Some economists, for example, warn that recently implemented or expanded tariffs could lift import costs and ripple through prices over the next few quarters.
Alan Detmeister of UBS, in remarks reported by CBS MoneyWatch, projected headline CPI around 3.7% and core CPI near 3.8% by the second quarter of 2026, an outlook that—if realized—would keep pressure on the COLA math without producing a 1970s‑style surge.
Of course, the headline COLA is only part of the story that hits a retiree’s bank account. A common frustration is that Medicare Part B premiums can rise at the same time, trimming the visible size of the Social Security increase for those who have Part B deducted from their checks. That’s not a flaw in the formula so much as an unfortunate collision of two separate systems that recalibrate on similar calendars.
If the 2026 COLA lands near 2.7% and Part B premiums move higher, many beneficiaries will experience a modest net change rather than the full, advertised increase. For a rough sense of magnitude, a retiree with a $2,000 monthly benefit today would see about $54 more per month at 2.7%, before any Medicare adjustments; bigger or smaller current benefits scale accordingly.
Does the COLA sufficiently counter the effects of inflation?
Whether the COLA “keeps up” with real‑world prices is a separate, persistent debate. TSCL’s recent survey found widespread skepticism among older Americans about the adequacy of the adjustment, with four in five respondents saying they felt inflation was 3% or higher. That sentiment squares with what many households see at the pharmacy counter, the grocery store, and in insurance renewals—even when top‑line inflation prints are drifting down.
“The data in this study shows what seniors have been telling TSCL for years: Social Security checks aren’t keeping up with inflation,” said Shannon Benton, the group’s executive director, arguing that the current measure may miss some of the costs retirees actually face. In an August 12 briefing, Benton added that even a slightly higher COLA could land with a thud if premiums and essentials keep marching upward.
Outside researchers echo parts of that concern from different angles. Teresa Ghilarducci, a labor economist at The New School, has warned that a moderate adjustment may not fully cover the inflation environment she expects ahead, a view that underscores why planning around a single percentage point can be tricky. Remember, too, that the COLA is backward‑looking by design: it measures what happened over the third quarter, not what will happen in the months after the increase takes effect.
That lag helps stabilize the system, but it also means beneficiaries can feel out of step when prices accelerate late in the year or when specific retiree expenses—health care, housing‑related costs, insurance—outpace the broader CPI‑W.
It’s worth keeping last year’s track record in mind as you weigh the latest estimate. TSCL’s prediction for the 2025 COLA matched the SSA’s final 2.5% figure, which lends credibility to its current 2.7% call. That said, no private forecast is official, and the September CPI‑W can still swing the outcome. A softer‑than‑expected print could pull the COLA back toward 2.5%; a hotter reading could cement 2.7% or even push the final to 2.8%. The prudent approach is to treat any estimate as a planning tool, not a promise.
What happens next is straightforward. We’ll get the remaining third‑quarter inflation reports in late September and early October, SSA will run the statutory calculation, and the agency will announce the official 2026 COLA in October. The new amount will then be reflected in January 2026 payments for retired workers and most other beneficiaries.
Between now and then, the smartest moves are practical ones: review your budget with a modest increase in mind, leave room for potential Part B premium changes, and avoid large spending commitments on the assumption of a bigger‑than‑expected raise. If the final number does print at 2.7%, most retirees will see a small but real boost to their monthly benefits—helpful, if not transformative, in a year when price pressures are ebbing but not entirely gone.
Bottom line: the 2026 COLA is shaping up to be slightly stronger than 2025’s, but the official call belongs to October’s data. For now, keep expectations grounded, keep an eye on those inflation releases, and remember that the line between “headline” and “take‑home” can blur once Medicare premiums and real‑world prices have their say.