If you’re relying on Social Security to cover your expenses, here’s an update you’ll want to know. Experts are predicting that the 2026 Cost-of-Living Adjustment (COLA) for Social Security benefits could be around 2.1%. This comes after a slightly higher 2.5% adjustment in 2025.
The projection comes from the Senior Citizens League (TSCL), an advocacy group that monitors benefits for seniors. While this number is not final, it reflects current trends in inflation and overall economic conditions.
What is COLA, and How Is It Calculated?
Every year, the Social Security Administration (SSA) adjusts benefits to account for inflation. This adjustment, called the COLA, is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). When inflation rises, COLA is supposed to help your benefits keep pace with increasing prices.
For 2026, early predictions suggest that inflation will continue slowing compared to recent years. This explains why the expected 2.1% adjustment is more modest than some beneficiaries may hope for.
Why Is the 2026 Prediction Lower?
In 2024, inflation showed signs of cooling, with the CPI-W rising 2.8% compared to the previous year. This is good news in the sense that prices aren’t climbing as quickly. However, it also means smaller COLA adjustments for seniors who depend on Social Security.
While prices may not be skyrocketing like they did during the pandemic years, they’re still rising. Essentials like food, housing, and healthcare remain costly, leaving many retirees worried about how far their benefits will stretch.
Will There Be Policy Changes That Affect COLA?
There’s ongoing debate about how COLA is calculated. Some lawmakers have proposed switching to a different method using a “chained” version of the CPI, which could result in smaller annual increases.
This method assumes that people can substitute cheaper products when prices rise. While that sounds reasonable on paper, it doesn’t account for seniors who often face fixed costs, like medication or rent, that can’t easily be swapped out for cheaper alternatives.
How Will This Affect Beneficiaries?
For seniors who rely heavily on Social Security—some for as much as 90% of their income—any change in COLA is significant. A recent survey from the Senior Citizens League found that 62% of older Americans worry their benefits won’t be enough to cover basic expenses.
With healthcare costs rising faster than general inflation, even a 2.1% increase may not provide much relief. Beneficiaries may need to explore other financial options or adjust their budgets accordingly.
What’s Next?
Although 2026 is still a year away, staying informed about these changes is crucial for retirees. The final COLA will be determined in late 2025, based on data collected during the year.
If you’re planning your retirement budget, consider building in some flexibility to account for the possibility of lower benefit increases. And remember, while the projected 2.1% may not be a game-changer, it’s still designed to help offset rising costs.
In the meantime, keep an eye on inflation trends and policy discussions. Social Security benefits play a critical role in millions of lives, and staying informed is key to making the most of them.
