What is a COLA, and why does it matter?
First things first. COLA stands for Cost-of-Living Adjustment. The Social Security Administration has been giving retirees yearly adjustments to keep pace with rising prices since 1975. They figure the adjustments based on something called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)—the government’s measure of inflation.
Here’s how it works: every year, officials look at how much the CPI-W changed from July to September. Whatever percentage increase they find becomes the COLA for the following year.
For example, in 2024, the CPI-W rose by 2.5%, so Social Security benefits got a 2.5% raise in 2025. It’s designed to help retirees keep pace with inflation—but as you’ll see, sometimes that increase isn’t enough.
What to expect in 2026
Now, let’s look to the future. Experts are projecting Social Security benefits will rise again in 2026, but the increase won’t be quite as life-changing as many had hoped.
Here are the current predictions:
- The Senior Citizens League (TSCL) is calling for a 2.7% increase.
- The Social Security Board of Trustees is projecting between 2.4% and 3%, with 2.7% being the most likely outcome.
- Mary Johnson, a longtime Social Security and Medicare policy expert, is calling it 2.8%.
- The official number will be announced on October 15, 2025, when the government releases September’s inflation report.
But no matter whose prediction you use, the outcome is about the same: the typical retiree can anticipate getting some $54 to $56 more a month in 2026. That amounts to $648 to $672 more in a year.
Why this is being called “historic”
If these predictions hold, 2026 will mark the fifth year in a row that Social Security benefits rose at least 2.5%. That has not happened since the 1990s.
That is good news on paper. Retirees are getting steady raises, which is not normal. It’s being called a historic event because raises that are sustained like that do not come along often.
But here’s the problem: just because benefits are going up doesn’t mean retirees are necessarily better off.
The bad news: It’s still not enough
As nice as an increase of up to $672 a year may sound, millions of retirees are all saying the same thing: it’s just not enough.
Why? Because everyday costs are rising faster than the COLA can keep up. For example:
- Groceries cost more than they did last year.
- Rent and property taxes have risen.
- Health care costs continue to rise, often outpacing inflation.
- Even basics like electricity, water, and gas are cutting into monthly budgets.
So, Social Security checks may be larger, but the extra money often disappears the moment it arrives. For most, the COLA increase is like running in place—no matter how much they get, prices seem to rise faster.
A real-life example
Imagine you’re a retiree receiving about $2,000 per month. With a 2.7% COLA, your check would go up by around $54. That sounds good, right?
But what if your grocery bill has gone up by $40 each month? And your Medicare premiums rise by another $20? Suddenly, your extra $54 is already gone—and you’re back to square one.
That’s the reality for millions of retirees. The COLA sounds good on paper, but in actuality, they often only cover the necessities.
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Why retirees are frustrated
That’s why so many retirees are frustrated. They read the headlines about a “historic COLA adjustment,” but when the money hits their bank accounts, it doesn’t go as far as they need.
Social Security alone is not proving to be enough for a number of aging Americans to keep up with inflation. That’s leading some to dip into savings, delay medical care, or even return to work part-time.
This social security video could be of help
