Social Security COLA Estimate for 2026 Reaches 2.5%

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The projection for the Social Security cost-of-living adjustment (COLA) in 2026 has been updated to 2.5%, based on the latest forecasts from The Senior Citizens League (TSCL) and independent Social Security analyst Mary Johnson.

This adjustment comes at a time when inflation, although easing from the peaks of 2022, continues to have a significant impact on the purchasing power of older adults. Factors such as new tariffs are starting to influence consumer prices as well.

The updated COLA forecast is derived from the most recent data from the Bureau of Labor Statistics, showing a 0.1% increase in the consumer price index for all urban consumers (CPI-U) in May. Year-over-year, prices have gone up by 2.4%, mainly driven by higher costs in shelter and food.

On the other hand, the CPI for urban wage earners and clerical workers (CPI-W) — the index used to calculate COLA — rose by 2.2% compared to the previous year.

Mary Johnson mentioned that the 2.5% estimate for the 2026 COLA is preliminary and subject to change. She highlighted that the ongoing tariffs introduced by the previous administration are starting to push prices higher, although the full impact remains uncertain.

There are indications that the decline in elevated prices is reversing, particularly in essential categories that affect retirees significantly, such as housing, food — especially meat, and automotive repairs.

Inflation Tracking and 2026 COLA Projections

TSCL’s revised 2.5% estimate is the fourth consecutive monthly increase in their COLA projection. However, TSCL has raised concerns about flaws in the current method of collecting inflation data, which could potentially distort future COLA estimates.

According to a recent TSCL news release, the Bureau of Labor Statistics is facing staffing shortages due to a federal hiring freeze, leading to a reduction in data collection efforts. Shannon Benton, TSCL’s executive director, voiced worries about the impact this could have on Social Security beneficiaries.

TSCL’s 2025 Senior Survey, set to be released soon, revealed that 80% of seniors believed inflation in 2024 exceeded 3%, significantly higher than the actual COLA of 2.5% for that year. This disparity is fostering distrust among retirees who are already grappling with rising costs and stagnant benefit growth.

Final Thoughts

As inflation continues to rise, seniors are advised to stay vigilant. TSCL’s research indicates a notable gap between reported government inflation figures and the real-world experiences of seniors. Keeping track of these discrepancies is crucial to ensure financial stability during retirement.