As prices continue to climb, the projected Social Security cost-of-living adjustment (COLA) for 2026 is drawing early attention — and concern. If you rely on these monthly benefits, a modest 2.4% increase may not be enough to keep up with everyday expenses.
Low Forecast Sparks Worry Among Retirees
A new forecast from the Senior Citizens League estimates that the Social Security COLA for 2026 could be just 2.4%. That would mark a sharp decline from the 3.2% increase seen in 2024 and the historic 8.7% boost in 2023.
The League’s projection is based on current inflation trends and recent Consumer Price Index data from the U.S. Bureau of Labor Statistics. While inflation has cooled, the cost of essentials like food, housing, and medical care remains high — especially for older Americans.
How the 2026 COLA Is Calculated
Each year’s Social Security COLA is determined using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), specifically from July through September.
That means while the 2026 COLA won’t be officially announced until October 2025, early estimates like this one give retirees a sense of what to expect — and how to plan.
The CPI-W does not always reflect the actual expenses older adults face, which are often heavier in areas like prescription drugs, rent, and utility bills.
According to the Bureau of Labor Statistics, inflation increased 3.4% year-over-year as of April 2024, but some key living costs rose even faster. Seniors are concerned that a 2.4% COLA won’t match their actual monthly needs.
Potential Impact on Retirees’ Budgets
For the average Social Security recipient, a 2.4% COLA could mean an increase of about $38 per month — not nearly enough to cover rising bills, insurance premiums, or food prices.
Here’s how it could affect fixed incomes:
- Rent: Median rents in many areas are still climbing steadily, according to data from Zillow.
- Healthcare: Medicare Part B premiums are expected to increase again in 2026, which could further erode the value of the COLA raise.
- Food and Utilities: Grocery costs and electricity rates remain volatile, especially in regions with extreme weather.
“Many older adults are already dipping into savings or skipping meals to afford their prescriptions,” Johnson added. “Even a slight shortfall in COLA impacts quality of life.”
Advocates Call for Fairer Adjustments
Groups like AARP and the Senior Citizens League are pushing for reforms to how the COLA is calculated. They advocate for a switch from CPI-W to CPI-E (Consumer Price Index for the Elderly), which more closely reflects seniors’ true spending patterns.
Congress has introduced bills in the past to address this, but no changes have passed into law.
In the meantime, older Americans are urged to:
- Review budgets now to prepare for a smaller-than-expected COLA.
- Look into Supplemental Nutrition Assistance Program (SNAP) or Low Income Home Energy Assistance Program (LIHEAP) benefits if eligible.
- Contact local aging services offices for support with housing, food, and health resources.
Stay Prepared as the Official Announcement Approaches
While the 2.4% figure is just a forecast, it serves as a wake-up call for millions of Social Security recipients who may already be feeling financial pressure. The official COLA will be confirmed by the Social Security Administration in October 2025, based on inflation trends through September.
Stay informed and follow us for more updates on retirement planning, Social Security changes, and resources that can help seniors manage rising costs.
This article was written by John Deluca. AI was used lightly for grammar and formatting, but the ideas, words, and edits are all mine.
