New projections indicate a 2.8% rise
Millions of Americans who count on Social Security could receive slightly larger checks next year. According to the latest inflation figures, experts now project that the 2026 Social Security cost-of-living adjustment (COLA) will be 2.8%, an increase from last month’s projection of 2.7%.
The Social Security Administration (SSA) will officially announce the 2026 COLA in October. Meanwhile, experts monitor inflation monthly to update estimates. Annual inflation rose 2.9% in August, up from 2.7% in July—the highest throughout the year. Core inflation, excluding food and energy, rose 3.1%, as economists predicted.
While those numbers pushed the COLA estimate slightly higher, experts say the hike may not provide much relief to retirees.
Medicare premiums might eliminate benefits
The 2.8% COLA would raise the average monthly Social Security benefit—$1,864.87 in August—by about $52. But much of that extra money will pay for higher Medicare costs.
Previously this year, Medicare Trustees projected the base Part B premium to increase by $21.50 per month, from $185.00 to $206.50 in 2026. That would be near the largest dollar increase in Medicare history, just short of the $21.60 hike in 2022, according to policy analyst Mary Johnson.
Prescription drug coverage costs may also rise. Nonprofit health analyst KFF approximated that increased Part D premium authorization under new rules may raise monthly prices by as much as $50 in 2026, from $35 in 2025. With over 33 million people enrolled in stand-alone drug coverage, many retirees stand to feel the pinch.
“Most beneficiaries will see little, if any, actual difference in their monthly budget,” said Johnson.
Increased poverty among seniors
Despite COLAs every year, numerous older Americans are struggling. Poverty rates for adults age 65 and older increased in 2024, reaching 15% from 14.2%, the U.S. Census Bureau reported. That is nearly one million more seniors in poverty—higher than all other age groups.
“Today’s Census report simply put it in print: low-income seniors are falling behind,” said AARP Foundation President Claire Casey. “Those age 65 and older were the only group whose rates of poverty increased. More needs to be done so everyone can age with dignity and security.”
Ramsey Alwin, director of the National Council on Aging, seconded this view, adding that “a few extra dollars (from COLA) won’t begin to give them true financial security.”
How COLA Is Calculated
COLA is calculated using the inflation rate monitored by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Specifically, the SSA uses the average CPI-W reading between July and September to calculate the adjustment the following year.
That makes the August inflation report important. In August, overall CPI increased 2.9%, while CPI-W increased 2.8%. If inflation accelerates in September too, the final COLA amount can increase somewhat higher than projections.
Recent COLA history
Social Security beneficiaries saw a 2.5% increase in 2025, following a 3.2% increase in 2024. The 2025 rise was the smallest since 2021. The 2023 COLA, on the other hand, was an all-time high of 8.7%, reflecting the sharp rise in prices after the pandemic.
Experts note that while COLAs allow Social Security to keep pace with inflation, they do not necessarily keep pace with higher costs for older Americans for health care, housing, and food.
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Who Receives Social Security?
In August 2025, more than 74.5 million Americans were receiving Social Security payments. They include retirees, disabled individuals, survivors of workers who have died, and recipients of Supplemental Security Income (SSI).
For all of them, the COLA announcement in October will determine how much their checks rise in 2026. While the expected 2.8% raise is a modest increase, the reality is that raising Medicare rates could swallow up most of the benefit—leaving seniors still struggling to make ends meet.
