Social Security COLA 2026: All seniors who receive Social Security should have already gotten their first payment for 2025. With the latest cost-of-living adjustment (COLA) of 2.5% in place, the average monthly benefit has increased to $1,976. This is about $49 more than what retirees received in December 2024.
While any increase is better than none, this small boost may not be enough to help retirees keep up with rising costs. Social Security benefits over the years have lost significant purchasing power.
According to the Senior Citizens League (TSCL), benefits have decreased in value by 20% since 2010. This decline has made it harder for retirees to afford basic necessities, and the trend seems likely to continue in 2025.
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What to Expect for the Social Security COLA 2026?
Many people are already looking ahead to 2026, hoping for a bigger COLA that will ease financial stress. The actual increase will not be announced until October 15, 2025, but early predictions are already emerging.
The Social Security Administration (SSA) calculates COLAs based on inflation data from July, August, and September of the previous year. The key measure used is the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
According to The Mortley Fool, some critics argue that this index does not accurately reflect the expenses of retirees, who spend more on healthcare and housing. An alternative measure, the Consumer Price Index for the Elderly (CPI-E), often shows higher inflation rates for seniors, but it is not currently used to calculate Social Security increases.
Recent inflation trends suggest that prices are not rising as quickly as they were in early 2024. While slower inflation means lower prices for goods and services, it also leads to a smaller COLA for Social Security recipients. If this pattern continues, the increase for 2026 will likely be smaller than in previous years.
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TSCL estimates that the COLA for 2026 could be around 2.1%. If this prediction is accurate, the average Social Security benefit would rise from $1,976 to about $2,017 per month. That means an increase of just $41 per month, or about $492 for the entire year.
This estimate is not final, and it could change depending on economic conditions in the coming months. TSCL’s past predictions have been fairly close to the actual COLA. In April 2024, their estimate was only 0.1% off from the final COLA announcement. Unless inflation rises unexpectedly, retirees should expect only a modest increase in 2026.
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Other Possible Changes to Social Security
COLA adjustments are not the only factors affecting Social Security. Some new policies may impact benefits in the near future.
Before leaving office, President Biden signed the Social Security Fairness Act. This new law will increase benefits for about 2.8 million government employees and their families. Many retirees are waiting to see exactly how this change will affect their payments.
Former President Donald Trump has also mentioned plans to eliminate taxes on Social Security benefits. According to the Tax Policy Center, this would reduce tax bills for many U.S. households by an average of $550 per year. It is unclear whether Congress will support this proposal, so retirees should not count on these tax cuts just yet.
Planning Ahead for 2026
There is still a long way to go before Social Security announces the official COLA for 2026. As the year progresses, inflation data will provide a clearer picture of what retirees can expect. In the meantime, seniors should prepare for a modest increase and adjust their budgets accordingly.
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While Social Security provides an important source of income, it may not be enough for all retirees to maintain their desired lifestyle. Those who rely heavily on these benefits should explore other options for increasing their income, such as savings, investments, or part-time work.
