Social Security COLA: Millions of Americans relying on Social Security benefits may need to brace for a modest cost-of-living adjustment (COLA) in 2026, with early estimates pointing to a potential increase of just 2.4% to 2.5%—one of the smallest in recent years.
COLA Estimate Slightly Higher but Still Modest
According to The Senior Citizens League, the 2026 COLA is currently projected at 2.4%, a slight uptick from the group’s earlier estimate of 2.3%. Meanwhile, Mary Johnson, a well-known Social Security policy analyst, estimates a 2.5% adjustment, the same as the official COLA set for 2025. While this may seem like good news, many retirees were already disappointed with 2025’s adjustment, and a repeat of that rate in 2026 may not offer much relief.
If the 2.5% COLA holds, the average monthly Social Security benefit of $1,948 could increase by around $40.70, bringing the average to $1,989.
Rising Costs vs. Modest Increases
The annual COLA is meant to help Social Security payments keep pace with inflation, using third-quarter CPI-W data (July to September) to determine the adjustment. However, many seniors argue that the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) doesn’t accurately reflect the rising cost of necessities like housing, food, and healthcare—areas where retirees spend most of their income.
A recent survey by The Senior Citizens League found that 94% of retirees believe the 2025 COLA was too low, and 80% estimate real inflation to be above 3%. That discrepancy has raised concerns about the fairness and accuracy of the CPI-W methodology.
Factors That Could Influence the 2026 COLA
Economists are closely watching inflation trends heading into the summer. Tariff policies under former President Donald Trump are expected to raise prices in the coming months. Ellen Zentner, chief strategist at Morgan Stanley, and Ken Kim, senior economist at KPMG, both warned that inflation could climb past 4% by fall, which would directly impact the final COLA figure.
That said, inflation has remained moderate in early 2025. Unless a significant economic shift occurs, analysts expect a COLA that is better than zero but not enough to fully cover real-world cost increases for seniors.
Retirement Planning Still Critical
For current workers, the uncertainty around COLA highlights the importance of not relying solely on Social Security during retirement. Experts recommend consistent saving through 401(k)s or IRAs to build financial independence. For example, saving just $250 a month over 35 years with a modest 8% return could yield more than $500,000.
With the official COLA announcement for 2026 due in October, seniors and retirees should prepare for a modest increase, while keeping an eye on inflation data and economic policy changes over the summer. For now, a 2.5% adjustment is the most realistic projection—but that number could change as more inflation data becomes available.