Current estimates of the 2026 Social Security cost-of-living adjustment (COLA) suggest beneficiaries will see a small gain of 2.2% to 2.3%, reflecting ongoing economic uncertainty and policy shifts under the Trump administration. The estimates, while higher than initial projections, remain below the 20-year average of 2.6% and reflect ongoing struggles for seniors confronting targeted inflation in key areas like healthcare and groceries.
Updated projections reflect tariff effect and chilling inflation
The Senior Citizens League (TSCL), a prominent advocacy organization, updated its 2026 COLA estimate to 2.3% in April 2025, after initial Consumer Price Index for Urban Wage Earners (CPI-W) data for March and expected inflationary pressures from newly announced tariffs. This is a 0.1% increase from its March estimate of 2.2%, which was consistent with independent analyst Mary Johnson’s estimate. Both predictions lag the 2025 COLA of 2.5% and constitute a multiyear drop from the 8.7% increase in 2023.
Average COLAs-setting CPI-W increased 2.7% on a month-to-month basis from year earlier levels in March 2025—a deceleration from earlier months but still above levels most relevant to retirees. TSCL’s patented methodology incorporates Federal Reserve rates, unemployment rates, and CPI-W trends, April’s revision of which helped to partly counter President Trump’s March 2025 declaration of 10% across-the-board tariffs on imports from over 180 countries. While 90% of those tariffs were provisionally rolled back in the face of bipartisan opposition, economists warn that even modest duties will disproportionately fall on medical device and pharmaceutical prices, which account for 15–20% of expenditures by elderly households.
Tariff uncertainty shrouds long-term forecasts
Experts point out that the existing COLA forecasts do not entirely capture tariff-driven inflation. The CPI-W data employed for the 2.3% forecast are before the April tariff announcements, and thus subsequent monthly adjustments may drive forecasts higher if import prices increase. For example, a 10% tariff on Canadian imports of drugs alone would increase annual healthcare expenses by $1,200 for the typical Medicare beneficiary, the Medical Association estimates. TSCL Executive Director Shannon Benton warned that ongoing tariffs on such necessities like insulin pumps and hearing aids would “outpace COLA protections, forcing seniors to have to choose between food and medication.”
Market volatility also adds to the problems. The S&P 500 dropped 4.2% in early April 2025 against tariff risks, reducing retirement fund balances and raising dependence on Social Security payments for 67% of recipients. Though the Federal Reserve’s interest rate hike pause has briefly softened housing costs, shelter inflation continues stubborn at 5.1% annually—about double the headline CPI-W metric.
Advocacy groups call for policy action
To offset declining COLA values, TSCL and advocacy associations are calling for structural reforms. Some of the proposals they advance include:
- Excluding tariff-free medical imports to avoid supply chain-based price increases
- Ending federal taxation of Social Security benefits, which are now imposed on recipients with incomes greater than $25,000 a year
- Using the CPI-E (Consumer Price Index for the Elderly) to more accurately capture elderly spending patterns
The Trump White House has shown receptiveness to Social Security withholding exemptions but continues to have tariffs as the preferred policy for bringing production back home. This contradiction came into the spotlight at an April 10 White House press briefing, where Press Secretary Karoline Leavitt said, “While we prioritize American production, we’re actively seeking carve-outs for seniors critical needs.”
Official COLA calculation and timeline
The Social Security Administration (SSA) will determine the 2026 COLA in October of 2025 using average CPI-W for July–September of 2025. The major dates are:
- April–June 2025: TSCL posts monthly forecast updates reflecting tariff effects
- September 30, 2025: End of period calculated for Q3 CPI-W
- October 15, 2025: SSA statutory posting deadline for official adjustment
Notably, the SSA approach has been criticized for overlooking geographic cost variations. Senior citizens residing in tariff-impact-heavy states like Arizona and Florida see inflation that is 1.4% higher than the nation’s CPI-W average due to being import-reliant on medical essentials, as per a 2025 Government Accountability Office report.
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