Retirees Worry Tariffs Will Negate Social Security COLA
Concerns about the impact of tariffs and inflation on retirement plans are on the rise, causing anxiety among many retirees.
A recent survey by Nationwide Retirement Institute revealed that half of retirees are “terrified” that tariffs could diminish their retirement income or savings. Additionally, 63% expressed worries that President Donald Trump’s trade policies might lead to inflation surpassing Social Security’s yearly cost-of-living adjustment (COLA).
Tina Ambrozy, head of strategic customer solutions at Nationwide, highlighted the current economic uncertainties, stating, “Today’s retirees are facing economic headwinds that feel more unpredictable and immediate than ever before.”
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The survey also revealed that nonretirees are more concerned about the effects of tariffs surpassing Social Security’s 2026 COLA, with 70% expressing worries. Moreover, individuals receiving professional financial advice showed higher levels of concern compared to those without such guidance.
With 83% of all respondents expressing concerns about the long-term viability of Social Security and three-quarters believing that the program will run out of funding during their lifetimes, the survey underscores widespread anxiety surrounding Social Security benefits.
Social Security faces significant financial challenges, with its trust funds projected to deplete by 2034 without Congressional intervention, potentially leading to a 19% reduction in benefits.
Social Security COLA: What to expect in 2026
Annually, Social Security benefits are adjusted based on inflation trends, with beneficiaries typically receiving a raise known as COLA. Predictions for the 2026 COLA suggest a 2.7% increase, although the official calculation will be announced in October based on third-quarter inflation data.
Despite the COLA’s intention to counter inflation, the true impact of price increases often erodes the raise. The Senior Citizens League reported a 20% decline in the buying power of Social Security payments since 2010, attributing it to lagging COLA adjustments.
Trump’s tariffs are expected to exacerbate inflation, potentially affecting the 2026 COLA. The Budget Lab at Yale projects a 1.8 percentage point inflation increase due to tariffs, potentially impacting household incomes.
The timing of price increases resulting from tariffs could influence the 2026 COLA adjustment, with beneficiaries potentially facing rising costs after the adjustment is finalized.
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