Social Security cost-of-living adjustment could increase 2.7% in 2026, according to a new estimate
Social Security beneficiaries may see a 2.7% cost-of-living adjustment (COLA) in 2026, a slight increase from the 2.5% raise received in 2025. The estimate comes from the Senior Citizens League, which bases its predictions on inflation figures from the Bureau of Labor Statistics. This potential 2.7% COLA could increase the average monthly benefit for retired workers by $54, from $2,008 to $2,062.
The COLA has averaged 2.6% over the last 20 years, making a 2.7% adjustment slightly higher than the previous year but below the 3.2% boost seniors received in 2024. The Social Security Administration (SSA) determines the COLA each year based on inflation data from July, August, and September. The upcoming adjustment, scheduled to be announced in October and go into effect in January 2026, will be based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
While the COLA is meant to keep benefits payments in line with inflation, economists have expressed concerns that a 2.7% adjustment may not be sufficient to counter the rising inflationary pressures faced by Americans. The latest CPI report indicates a 2.9% increase in August compared to 2.7% in July, with imported products becoming more expensive, potentially due to tariffs driving up prices.
Shannon Benton, the executive director of the Senior Citizens League, highlighted that higher Medicare Part B premiums could offset the cost-of-living adjustment for some Social Security recipients. She emphasized the ongoing struggle for seniors living on fixed incomes, where benefits may not adequately cover real-world expenses.
As the SSA prepares to announce the COLA for 2026, many are anxiously awaiting the decision and its implications for retirees. The potential 2.7% adjustment offers some hope for increased benefits, but the impact of rising inflation and healthcare costs remains a significant concern for older Americans.
