If you rely on Social Security benefits, you know that cost-of-living adjustments (COLAs) play a vital role in helping your benefits keep up with rising prices. The 2026 COLA, set to be announced soon, is especially important because many retirees feel the previous COLAs were not enough, according to a report by The Motley Fool.
In this article, we’ll go over the latest COLA forecasts and explain why the 2026 adjustment might not be as big as expected.
How Social Security COLAs Are Calculated
Each year, Social Security benefits are adjusted to keep pace with inflation. These adjustments, known as COLAs, are based on the CPI-W, which is a measure of price changes for urban workers who earn wages or salaries.
The calculation works like this: the CPI-W from July to September of the current year is compared to the CPI-W from the same months of the previous year. The percentage increase becomes the COLA for the following year.
For example, if the CPI-W increased by 2.5% in the third quarter of 2024, Social Security benefits would see a 2.5% increase in 2025.
The Bureau of Labor Statistics will announce the September CPI-W data on October 15, and the official 2026 COLA will be revealed by the Social Security Administration later that same day.
Social Security’s 2026 COLA Forecast: 2.4% to 2.7%
According to the Senior Citizens League (TSCL), a nonprofit advocacy group, the 2026 COLA forecast has been revised several times this year due to higher-than-expected inflation. As of July, TSCL estimates a 2.6% increase in Social Security benefits for 2026.
In June, the Social Security Board of Trustees predicted a 2.7% rise in benefits for 2026. Additionally, the Congressional Budget Office (CBO) has forecasted a 2.4% increase.
Here’s how different COLA estimates could affect the average Social Security benefits:
| Beneficiary Type | Average Benefit in June 2025 | After 2.4% COLA | After 2.7% COLA |
|---|---|---|---|
| Retired worker | $2,005 | $2,053 | $2,059 |
| Spouse of retired worker | $953 | $976 | $979 |
| Survivor | $1,571 | $1,609 | $1,613 |
| Disabled worker | $1,582 | $1,620 | $1,625 |
For instance, under the 2.6% COLA forecast, a retired worker could see their monthly benefit increase by $48 to $54. However, these numbers are still estimates and can change based on inflation trends through September.
Why the 2026 COLA Might Not Be Enough
The CPI-W is based on the spending habits of urban workers who earn hourly wages, but these workers are generally younger than Social Security beneficiaries.
Retirees, on the other hand, tend to spend more on housing and healthcare, which have been increasing faster than other goods and services. This makes the CPI-W an imperfect measure for retirees, who face higher costs in these areas.
For example:
CPI-W inflation: 2.4% through June
Medical-care inflation: 2.8% through June
Housing inflation: 3.9% through June
These numbers show that medical and housing costs are rising faster than the general inflation rate, which means the 2026 COLA may not be enough to keep up with these specific costs. If this trend continues, Social Security benefits could lose purchasing power in 2026, leaving retirees with less money to cover their essential needs.
This scenario has already played out in the past two years, which is likely why many retirees feel that recent COLAs were not sufficient.
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