Key Points
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The official Social Security COLA will be announced in October, but there are already estimates of where it might land.
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While retirees may collect a slightly higher raise, that’s not necessarily a good thing.
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Social Security is facing some major hurdles in both the short and long term.
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The $23,760 Social Security bonus most retirees completely overlook ›
The Social Security cost-of-living adjustment (COLA) aims to help benefits maintain their buying power over time. Because retirees receive benefits for the rest of their lives, this adjustment makes it easier for seniors to rely on their monthly checks even as costs increase.
The official COLA won’t be announced until October, as the Social Security Administration (SSA) uses third-quarter inflation data to determine the next year’s adjustment. However, some organizations estimate the future COLA based on inflation data for the year so far. Here’s why 2026 may be shaping up to be a no-win scenario for retirees.
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This is the COLA estimate for 2026
Every month, nonprofit advocacy group The Senior Citizens League releases an estimate for the following year’s COLA based on data from the Consumer Price Index. While these predictions are not official or affiliated with the SSA, they can sometimes be helpful in identifying trends in inflation.
According to the most recent estimate from mid-July, the COLA for 2026 might land at 2.6%. That’s an uptick from the 2.1% estimate from January, and it’s only slightly higher than the 2025 COLA of 2.5% that beneficiaries are currently receiving.
|
Month |
COLA Estimate From The Senior Citizens League |
|---|---|
|
July |
2.6% |
|
June |
2.5% |
|
May |
2.4% |
|
April |
2.3% |
|
March |
2.2% |
|
February |
2.3% |
|
January |
2.1% |
Data source: The Senior Citizens League.
A steadily increasing COLA may seem like good news on the surface. However, the COLA is directly tied to inflation rates. So the fact that estimates have been steadily increasing also indicates that inflation has been creeping back up — and if more tariffs are on the way, that could exacerbate the problem.
For most seniors, surging inflation will have a bigger impact on their budgets than a slightly higher COLA. Food costs soared by close to 24% between 2020 and 2024, according to data from the USDA, while transportation costs increased by more than 34% in that time.
The average retired worker collects around $2,000 per month from Social Security. A 2.6% COLA would amount to a raise of around $52 per month, and even the record-breaking 8.7% COLA in 2023 would have only resulted in around $174 more per month. While that extra cash can certainly help with rising costs, it may not make as much of a difference as some retirees expect when costs are quickly increasing.
Social Security COLAs are struggling to keep up
Rising inflation is both a short- and long-term issue for Social Security. Although the COLA is designed to help Social Security keep up with inflation, benefits have still been steadily losing buying power.
Since 2010, benefits have lost around 20% of their purchasing power, according to a 2024 report from The Senior Citizens League. At the time of the report’s publishing, the average retired worker received around $1,860 per month in benefits. If those payments had the same buying power as in 2010, however, the average benefit should have been around $2,230 per month.
In other words, loss of buying power has essentially cost the average retiree around $370 per month in potential benefits. If this trend continues, it will become even more difficult for older adults to survive on Social Security.
What can you do to protect your retirement?
You may not have much control over COLAs or inflation trends, but you can take steps to reduce your dependence on Social Security.
If you haven’t retired yet, delaying claiming benefits can boost your payments by hundreds of dollars per month. Filing at your full retirement age (which is age 67 for everyone born in 1960 or later) will result in receiving up to 30% more per month compared to filing at 62. And by taking benefits at 70, you can collect between 24% and 32% more than you’d get at your full retirement age.
For those who are already retired, your situation may be a bit tougher. If you can swing it, it can be helpful to build a source of passive income or pick up a temporary side job just to have some extra savings.
If nothing else, it’s helpful to understand the challenges Social Security is facing and adjust your expectations accordingly. While a higher COLA may be on the horizon, understanding its limitations can make it easier to protect your finances.
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