Every year, the Social Security Administration (SSA) adjusts benefits through a cost-of-living adjustment (COLA) to help keep pace with inflation.
The exact raise for 2026 won’t be confirmed until later in 2025, but analysts and advocacy groups are already making estimates based on current inflation data.
What is the COLA and how is it calculated?
The COLA is a percentage increase applied to Social Security and Supplemental Security Income (SSI) benefits to offset inflation.
It is tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The SSA compares the average CPI-W for July, August, and September of the current year with the same period a year earlier.
The percentage change becomes the COLA for the following year.
In addition, the SSA outlines future changes: starting in 2028 (or later), some proposals call for using a different index (CPI-E) or chained CPI variants.
What are the leading estimates for the 2026 COLA?
While the official 2026 COLA will be announced in October 2025, most independent forecasts now cluster around 2.7 %.
- The Senior Citizens League (TSCL) projects a 2.7 % COLA for 2026.
- Mary Johnson, a retired policy analyst, expects something slightly higher—around 2.8 %—based on inflation through mid-2025.
- Earlier in 2025, TSCL’s forecasts were lower (e.g., 2.5 %) but have trended upward as inflation data have strengthened.
- AARP notes that CPI-W in August 2025 increased about 2.8 % year over year, which supports a modest bump in 2026 benefits.
So far, the consensus is that 2026’s increase will surpass the 2.5 % COLA awarded in 2025, though not dramatically so.
What would a 2.7 % COLA mean in dollar terms?
If the COLA ends up being 2.7 %:
- For a retiree whose benefit is about $2,008 (the average worker’s benefit in 2025), the increase would be roughly $54 per month.
- Survivor or spouse benefits and disability benefits would see smaller absolute increases (for example, $40-$45 extra per month) depending on their base amount.
- However, higher Medicare Part B premiums could offset some or all of the gain. TSCL warns that in some scenarios, the premium increase may consume much of the COLA increase.
Thus, your net benefit after deductions might be less than the headline COLA suggests.
What factors could push the 2026 COLA higher or lower?
Several moving parts could influence the final figure:
- Third-quarter inflation (July–September 2025)
Since the COLA relies on CPI-W in those months, a spike or drop in inflation during that span will heavily affect the outcome. - Volatility in food, energy, and housing costs
Retirees often spend more on these essentials. If these sectors rapidly move, the CPI-W may shift accordingly. - Index choice or legislative changes
Over time, there is debate about using CPI-E (an elderly inflation measure) or chained CPI for COLA. That could tilt results upward or downward. - Medicare premium increases
If Part B or other healthcare premiums increase, they may absorb a large share of the COLA. TSCL and other analysts mention this as a major risk. - Economic or policy shocks.
Unexpected inflation shocks, tax changes, or monetary policy shifts could push inflation beyond what forecasts anticipate.
When will the official 2026 COLA be announced?
SSA typically announces the COLA in October, after September CPI data is published. That adjustment becomes effective January 1, 2026.
Occasionally, external factors (e.g., government shutdowns delaying data releases) can affect the timing of the announcement.
What should beneficiaries do to prepare now?
- Run projections using your current benefit spot and assume a COLA range (e.g., 2.5 % to 3.0 %) to anticipate budget changes.
- Watch inflation trends, especially the CPI-W changes in mid to late 2025.
- Account for Medicare premium changes when estimating your net increase.
- Stay updated when SSA publishes formal estimates or notices about COLA rules or index changes.
