COLA countdown: Social Security benefits estimated to rise 2.7% in 2026

More than 74.5 million people receive Social Security benefits, according to the Social Security Administration (SSA). Many of them rely on Social Security for their financial well-being. For some 21.8 million seniors, it may be their only form of income in retirement.

Each year, the SSA announces an annual cost-of-living adjustment — or COLA — to benefits to help you keep up with rising inflation and an uncertain economy. With new tax legislation falling short for low-income seniors and inflation creeping higher, the nonpartisan Senior Citizens League (TSCL) projects the Social Security COLA for 2026 at 2.7% as of September — its most recent prediction for 2026 — holding to August’s prediction of 2.7%. The new prediction is a bump from the projected COLA of 2.1% at the start of 2025 and only slightly higher than last year’s actual 2.5% cost-of-living adjustment.

Despite adjustments, the TSCL estimate is not trending much higher compared with recent years, sparking worries of financial insecurity for seniors. With the official October 15 COLA announcement approaching, there’s little time for things to take a turn.

How is Social Security COLA calculated?

The Social Security cost-of-living adjustment aims to level the playing field and boost benefits in step with rises in inflation. The adjustments aren’t arbitrary. The Social Security COLA calculation uses data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) released by the Bureau of Labor Statistics at a specific point in time to inform the increase.

“The SSA COLA is not a mystery, it is based on the CPI-W,” says Brooke Petersen, CFP, ChFC and wealth consultant at investment advisory firm Conrad Siegel. “The COLA is based on the percentage increase in the CPI-W from the third quarter of the previous year to the third quarter of the current year.”

Set by law, this calculation has been automatic since 1975, thanks to a COLA provision in the 1972 Social Security Amendments. Since 1975, there have been three years when the calculation resulted in a 0.0% COLA because there wasn’t an increase in the CPI-W: 2010, 2011 and 2016.

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What is the 2026 COLA prediction?

The current Social Security COLA projection for 2026 is 2.7%, according to the Senior Citizens League. TSCL updated its 2026 COLA prediction based on August CPI-W data, which came in at an elevated 2.9% on September 11. TSCL’s cost-of-living-adjustment projection is in line with last month’s prediction of 2.7%, when August’s CPI-W came in at a steady 2.7%.

If TSCL’s estimate for 2026 holds, seniors can expect next year’s COLA to be only slightly higher than last year’s COLA, when the adjustment was 2.5%. The official COLA increase uses third-quarter data from July through September.

COLA over the last decade: 2015 to 2025

COLA has varied widely over the past 10 years. The lowest COLA in that timeframe was in 2016 at 0.0%, and the highest was in 2023, when COLA was a whopping 8.7%.

The Social Security 2025 COLA increase was a lower 2.5%.

The projected 2026 COLA for Social Security is 2.7% according to an September 11 TSCL press briefing, which is only slightly higher than last year’s adjustment. That percentage may change, but the concern is that the COLA increase isn’t enough.

A 2025 survey from the Employee Benefit Research Institute echoes that sentiment, with 70% of workers and nearly 50% of retirees concerned about rising costs, and 40% of retirees saying that healthcare expenses are higher than expected in retirement.

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What the 2026 COLA increase means for your retirement

If you’re currently receiving Social Security benefits, the projected 2026 COLA for Social Security can give you an idea of what kind of increase you might see. But you’ll have to hold tight for the official numbers.

“The COLA applied to beneficiaries’ checks starting in January [of next year] will be calculated and announced in October,” says Martha Shedden, president and co-founder at the National Association of Registered Social Security Analysts.

The increase can help battle inflation and try to retain purchasing power, but other costs offset the benefit of your Social Security benefits.

“Medicare Part B premiums have the largest impact on the net amount of retirees’ Social Security income since those premiums are deducted from the Social Security checks,” says Shedden.

The main issue is that the COLA increase doesn’t account for all of the added costs everyone’s facing, especially seniors paying for Medicare on limited incomes.

“As we have all experienced, the cost of goods and services are significantly higher,” says Petersen. He explains that the increases for Medicare Part B and Medicare Part D have significantly exceeded the Social Security COLA, eroding purchasing power.

As of now, the Social Security COLA projection for 2026 is a slight increase from the 2025 COLA, which could feel like a bigger blow. But we’ll have to wait a few more months until October to find out.

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FAQs: Social Security and your retirement

Learn more about Social Security and your benefits with these commonly asked questions. And take a look at our growing library of personal finance guides that can help you earn money, save money and grow your wealth.

What is the average Social Security check?

The average Social Security check is $1,955 a month as of September 2025, according to the latest data from the Social Security Administration. Individual monthly benefits vary and could be more or less than the average.

What is the Senior Citizens League?

The Senior Citizens League calls itself the one of the nation’s largest nonpartisan seniors groups with a mission to educate older Americans and retirees about their rights and freedoms as U.S. citizens and protect the benefits — including Social Security — they’ve earned and paid for.

I’m worried about outliving my retirement savings. What are some tips to make it last longer?

As you approach retirement, one of the most critical decisions you’ll face is how to strategically withdraw from your hard-earned savings. The order in which you tap into your various retirement accounts can significantly impact your tax burden and the longevity of your nest egg funds. While there’s no one-size-fits-all withdrawal order, learn general rules of thumb in our guide to a retirement withdrawal strategy.

How long has Social Security been around?

Social Security was signed into law by President Franklin D. Roosevelt in August 1935 with the Social Security Act to provide income to Americans in retirement. The country began paying taxes into the program starting in 1937.

That first year, recipients received benefits as a one-time payment. Monthly Social Security benefits started in 1940.

How much money can I make in retirement and still collect Social Security?

For the 2025 tax year, your annual earnings limit is $23,400. If you’ll reach full retirement age in 2025, the most you can earn in the months before retirement is $62,160.

Enter your birthdate and salary into the SSA’s earnings test calculator to see how your earnings before retirement might affect your Social Security benefits.

Sources

• Monthly Statistical Snapshot, August 2025, Social Security Administration. Accessed September 11, 2025.

• 35th Annual Retirement Confidence Survey Reports Worker Confidence Unchanged, While Retirees Feeling Better, Employee Benefit Research Institution. Accessed September 11, 2025.

• Cost-of-Living Adjustment (COLA) Information for 2025, Social Security Administration. Accessed September 11, 2025.

• Projected COLA for 2026 Remains at 2.7%, The Senior Citizens League. Accessed September 11, 2025.

• Consumer Price Index Summary, U.S. Bureau of Labor Statistics. Accessed September 11, 2025.

About the writer

Melanie Lockert is an L.A.-born and Brooklyn-based freelance writer with a decade of experience in personal finance. Melanie started the Dear Debt blog in 2013 and chronicled her journey out of $81,000 in student loan debt. She published a book of the same name in 2016. Her personal finance expertise has been featured on Fortune Recommends, CNN, Yahoo Finance and Business Insider, among other publications. She is also the host of the Mental Health and Wealth Show and cofounder of the Lola Retreat, a finance event for women.

Article edited by Kelly Suzan Waggoner

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