Smaller COLA expected — For now
Having already experienced a 2.5% Social Security cost-of-living adjustment (COLA) in 2025, retirees will no doubt be disheartened to learn that early estimates for 2026 point to an even smaller increase. According to currently available inflation figures, the estimated COLA for next year is just 2.3%, according to the Senior Citizens League, an advocacy group independent of any particular organization.
The Social Security Administration calculates COLAs using third-quarter inflation figures, so the final number won’t be known until later this year. But if current trends hold, seniors might see one of the smallest benefit increases in recent memory.
Tariffs could change the forecast
One wild card could change the landscape: tariffs in 2025 imposed by the Trump administration. Although the full details remain unclear, the majority of economists are in general agreement that tariffs tend to put upward pressure on consumer prices.
If inflation were to begin going up later in 2025—namely, during the July-to-September stretch on which the COLA is calculated—beneficiaries could stand to see significantly more than anticipated in the form of an added bump to their monthly payments for 2026.
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Inflation means bigger checks — and larger bills
While a larger COLA might seem like a blessing for seniors, it has one giant catch. COLAs are supposed to keep up with inflation, not outstrip it. If consumer prices spike due to tariffs, any increase in Social Security benefits could be offset by higher grocery fees, drugstore costs, and electricity bills.
In short, the larger COLA does not always translate into more financial security. Most of the time, it just allows seniors to break even.
Seniors may feel the squeeze
Tariffs would especially be expensive for fixed-income retirees. Economists worry import taxes might raise the cost of prescription drugs, a category where most seniors are already financially stretched. The price of food may rise, either from increased imported staples or from the transmission of higher costs of production by producers.
For Social Security recipients already managing on every last cent, these changes might make everyday life a bit more complicated, even as there might be some benefit increase.
Plan for uncertainty
Seniors must plan for different eventualities before it can be said what the ultimate COLA will be. Whether the adjustment will be 2.3%, 4%, or something in between, there is sense in planning ahead. That might mean cutting back on expenses, exploring the potential of part-time work, or looking for alternatives to supplement retirement income.
The bottom line: 2026 COLA could come in higher than anticipated, but retirees won’t be any richer for it.
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