The Social Security Administration (SSA) announced its Cost-of-Living Adjustment (COLA) for 2025 in October 2024, leaving many retirees disappointed.
With inflation still affecting everyday expenses, many Social Security beneficiaries feel that the increase in benefits isn’t enough to keep up with the rising cost of living.
Now, attention has shifted to 2026 COLA projections, and the Senior Citizens League (TSCL) has released an updated estimate. With inflation showing signs of persistence, TSCL has raised its COLA forecast for 2026 from 2.1% to 2.3%, meaning retirees could see a slight bump in their monthly checks.
Let’s take a closer look at how COLA adjustments are determined, what the latest projections mean, and how they compare to inflation.
COLA
The Cost-of-Living Adjustment (COLA) is designed to ensure that Social Security benefits keep pace with inflation. It is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which tracks changes in prices for goods and services.
However, critics argue that CPI-W does not accurately reflect the spending habits of retirees, as it underweights medical expenses—one of the largest costs for seniors.
Many experts advocate for using the Consumer Price Index for the Elderly (CPI-E), which places greater emphasis on healthcare costs and could lead to higher COLA adjustments.
COLA Adjustments
Over the past decade, COLA increases have been relatively low, with some years seeing no adjustment at all due to deflation. Here’s a look at some of the lowest COLA adjustments in history:
| Year | COLA Increase |
|---|---|
| 2010 | 0.0% |
| 2011 | 0.0% |
| 2016 | 0.0% |
| 2017 | 0.3% (Lowest ever positive adjustment) |
While COLA adjustments have helped offset inflation over time, many retirees feel the increases aren’t sufficient to cover real-world expenses like healthcare, housing, and food costs.
COLA Projections
Following the Bureau of Labor Statistics (BLS) January inflation report, TSCL raised its 2026 COLA estimate from 2.1% to 2.3%.
- This would result in the average retired worker’s monthly check increasing by approximately $46 in 2026.
- Independent Social Security policy analyst Mary Johnson, who recently retired from TSCL, predicts that the 2026 COLA will remain at 2.1%, slightly lower than TSCL’s revised estimate.
Increase
The increase in COLA projections was triggered by a modest rise in inflation:
- The Consumer Price Index for All Urban Consumers (CPI-U), a broader measure of inflation similar to CPI-W, rose 0.5% in January 2025, marking the largest monthly increase since August 2023.
- On a 12-month consecutive basis, CPI-U has increased by 3%.
- If inflation continues to rise at this pace, it could further impact the final COLA calculation for 2026.
Beneficiaries
While a 2.3% COLA increase would provide modest relief for retirees, it may still fall short of covering rising expenses, especially in areas like:
- Healthcare costs – Medical expenses often rise faster than general inflation.
- Housing – Rent and home prices continue to increase.
- Utilities and groceries – Everyday necessities are becoming more expensive.
For 52 million retired beneficiaries, the average Social Security payment in 2024 is $1,978.77 per month. A 2.3% COLA adjustment would increase this by around $46 per month in 2026.
However, many seniors argue that COLA adjustments should be based on actual senior expenses rather than a metric designed for urban wage earners.
Final Thoughts
The 2026 Social Security COLA is projected to increase by 2.3%, providing a modest boost to retirees’ monthly checks. However, with inflation still a concern, many seniors believe that the adjustment won’t be enough to fully offset the rising costs of living.
As we move further into 2025, inflation trends will continue to shape the final COLA calculation, which the SSA will officially announce in October 2025.
In the meantime, beneficiaries should monitor updates and consider other financial strategies to help manage expenses in retirement.
FAQs
What is the projected COLA increase for 2026?
TSCL estimates a 2.3% COLA increase, raising benefits by about $46 per month.
How is the COLA calculated?
It’s based on the CPI-W, which tracks inflation for urban wage earners.
Why do some experts prefer CPI-E for COLA calculations?
CPI-E better reflects senior expenses, especially healthcare costs.
When will the 2026 COLA be officially announced?
The SSA will announce the final COLA in October 2025.
Will the 2026 COLA be enough to cover inflation?
Many retirees feel the increase won’t fully offset rising costs.
