As we move closer to the 2026 Social Security Cost of Living Adjustment (COLA) announcement, retirees are paying close attention to the forecasts to gauge how their benefits may change. COLA is essential for helping Social Security recipients maintain their purchasing power in the face of inflation.
As we move closer to the 2026 Social Security Cost of Living Adjustment (COLA) announcement, retirees are paying close attention to the forecasts to gauge how their benefits may change. COLA is essential for helping Social Security recipients maintain their purchasing power in the face of inflation.
The good news.
The good news is that an increase in benefits is expected. According to the early forecasts, retirees can expect a modest increase in their Social Security benefits in 2026. The Senior Citizens League (TSCL) has recently updated its estimate, projecting a 2.3% COLA for 2026. This follows a 2.5% adjustment in 2025 and a 3.2% increase in 2024, suggesting a trend of positive, albeit smaller, benefit increases.
For the average retiree receiving $1,976 monthly, a 2.3% increase would add approximately $45 to their monthly income. Although it is not a huge jump, it does provide some financial relief, especially when managing everyday expenses.
The bad news.
While retirees rejoice that there is hope of an increase in their benefits, the bad news is that the increment may not keep pace with the rising cost of things.
Despite the projected increase, many retirees worry that their Social Security benefits won’t stretch far enough as Inflation continues to drive up the costs of healthcare, housing, food, and other essentials.
Experts like Mary Johnson, a policy analyst for Social Security and Medicare, point out that the COLA often doesn’t fully reflect the inflationary pressures seniors face, particularly in healthcare. As a result, even with a COLA increase, retirees may feel financially squeezed.
The CPI-W is one of the key indicators TSCL uses in its model to project the next COLA. However, the most recent CPI-W figure available was for March. This number didn’t include the full impact of tariffs implemented by the Trump administration. The effects of those tariffs will likely start to be reflected in the CPI-W metric beginning in April.
The senior Citizens League (TSCL) Executive Director, Shannon Benton, said in a press release, “Along with most economists, TSCL expects the new tariffs to lead to higher inflation. Our COLA model will likely reflect that in the coming months as the CPI-W and other economic indicators respond to the new import tax policies.”
Economic factors affecting the 2026 COLA
Several key factors are influencing the 2026 COLA predictions:
Inflation trends: Inflation has decreased from its 2022 highs but remains stubbornly persistent. In December 2024, the CPI-W posted a 2.8% annual increase, signaling that retirees will still grapple with elevated prices.
Tariffs on imported goods: New tariff policies could drive up prices on consumer goods, potentially spiking inflation rates again. The Senior Citizens League has warned that tariffs could directly affect retirees’ wallets by increasing living costs.
Healthcare costs: Healthcare inflation continues to be a major concern for retirees. Medical expenses typically outpace general inflation, consuming a large share of seniors’ incomes.
A modest increase will offer some kind of financial relief to retirees, but persistent inflation and the rising cost of essentials mean that many will continue to feel financial pressure.
