For many retirees, the monthly Social Security benefit serves as a necessary source of income without which they may not be able to make ends meet. For some retirees, it is even their sole source of income during their sunset years. Social Security benefits are, however, a fixed income and as such, inflation hikes can potentially have dire consequences on the finances of these households.
In order to prevent this, the Social Security Administration (SSA) enacts a Cost of Living Adjustment to all benefit amounts once a year to account for the effects of inflation. Through the addition of this Cost of Living Adjustment, or COLA, the benefit is meant to retain its buying power relative to the current cost of things, however, a growing number of seniors are sharing a sense of frustration with regards to their monthly benefit income. Many seniors feel that the COLA is much lower than the actual effects inflation that they are feeling.
For 2026, the COLA projections are currently standing at 2.7% based on July data as published by the Bureau of Labor Statistics (BLS). However, before seniors even get to see this modest bump to their benefits, it may get lost in rising expenses, as well as the effects of tariffs. Here is what you need to know.
2026 COLA projections
The annual COLA is determined using a measure of costs 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 for the same period of the previous year. If there is an increase, this percentage figure becomes the next COLA. If there is a decrease, the COLA defaults to 0.0% meaning that benefits will remain unchanged in the next year.
Using the data available to date, The Senior Citizens League (TSCL), a nonpartisan seniors advocacy organization, has estimated a COLA of 2.7% for 2026. A study recently conducted by TSCL has also revealed that almost all participants felt that inflation was actually 3% or higher.
According to TSCL Executive Director, Shannon Benton, “American seniors’ lack of access to basic amenities in their communities is a major challenge. Our research shows a statistically significant connection between convenient access to healthcare and entertainment services and seniors who are more satisfied with their current lives. Seniors with free or subsidized access to public transport also report higher life satisfaction.”
Tariffs add to seniors’ worries
In addition to feeling as though the COLA does not sufficiently account for the costs held by seniors, many retirees are now also fearing that President Trump’s tariffs will have greatly negative impact on their savings and retirement income. According to the latest survey conducted by the Nationwide Retirement Institute’s Social Security, “more than 6 in 10 believe rising tariffs will drive inflation beyond what the COLA can cover.”
The survey has further revealed that 52% of seniors have cut back on discretionary spending, while 31% are reducing spending on essential items such as groceries or medication.
As things stand, inflation has not had any massive spikes despite the hiked tariffs (the 2025 COLA was 2.5% while 2026 estimates stand at 2.7%). However, the wholesale price data of last month has now raised concerns in experts that the effects of the tariffs are still en route to consumers. Drawing from the most recent BLS data, Seema Shah, chief global strategist at Principal Asset Management, wrote the following: “Inflation calm is unlikely to last. 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.”
Additionally, according to independent analyst and Social Security expert Mary Johnson, “You could make the case that tariffs are likely to drive up inflation more than Social Security COLA actually rises or can cover.”
“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,” Johnson added. “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.”