If you receive Social Security, you may be wondering what your 2026 cost-of-living adjustment (COLA) could look like. The first clue arrived with the July inflation report. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) — the official measure used to set the COLA — was 2.5% higher in July compared to the same month last year.
This number is only the first of three months that will be used in the final calculation, but it is already shaping expectations for a modest increase in benefits starting January 2026.
What experts are predicting for the 2026 cola
Several economists are weighing in on what this early number could mean—
- Indivar Dutta-Gupta, a visiting fellow with the National Academy of Social Insurance, said: “We’re likely to see a relatively historically normal COLA, maybe in the range of 2.6 to 2.7 percent.”
- Mike Lynch, managing director at Hartford Funds, expects something in the “low to mid” 2% range, similar to the 2.5% increase Social Security recipients saw for 2025.
The final number will be announced in October, after August and September inflation data are released.
How a cola increase affects monthly payments
A COLA in the 2.5% range would mean about $50 more per month for the average retired worker, whose monthly benefit was $2,006 in July 2025.
Here is what that could look like for different benefits:
- Retired worker: +$50 (from $2,006)
- Average survivor benefit: +$39 (from $1,574)
- Social Security Disability Insurance (SSDI): +$36 (from $1,445)
While any increase helps, some experts worry it may not be enough to fully keep pace with rising costs, especially if tariffs and other factors push prices higher later in the year.
Why cola matters so much for retirees
For many older Americans, Social Security is their only source of inflation-protected income. Bill Sweeney, AARP’s senior vice president of government affairs, explains why COLA is so important:
“This wasn’t originally part of Social Security,” Sweeney says. “In 1972 AARP fought to make COLAs automatic rather than subject to a congressional vote. For more than 50 years, the COLA has allowed America’s seniors to keep up as everyday costs continue to rise — from groceries to housing to prescription drugs.”
How the cola is calculated
The Social Security Administration determines the COLA by comparing the average CPI-W for July, August, and September of the current year to the same period in the previous year. If there is no increase in prices, there is no COLA — something that has happened in 2009, 2010, and 2015.
Historically:
- From 2001 to 2020, the average COLA was about 2.2%.
- The largest ever was 14.3% in 1980.
- The recent high was 8.7% in 2023, following a period of rapid inflation.
Concerns about whether cola keeps up with real costs
Some economists note that the CPI-W measures expenses for a “typical urban worker,” not older adults who often face higher medical costs and other age-related expenses.
Dutta-Gupta points out: “Sometimes the COLA will understate rising costs faced by people with disabilities and the elderly who depend on Social Security benefits.”
Labor economist Teresa Ghilarducci also warns that a moderate COLA “probably won’t be enough to cover the inflation rates that we’re headed into,” especially if tariffs push prices higher in the months ahead.
Planning beyond the cola
Even though a COLA increase is helpful, Mike Lynch advises retirees to think about their broader financial picture. “It’s not our parents’ or grandparents’ retirement anymore,” he says. “It’s probably going to be a lot longer, a lot more active, which means they’re going to need more money.”
That means it is wise to consider savings, investments, and other income sources in addition to Social Security.
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