The cost of living is going up every year, making it hard for many retired people to keep up with daily expenses. To help with this, Social Security gives an annual Cost-of-Living Adjustment (COLA). This increase is meant to make sure that retirees don’t lose the value of their monthly payments as prices rise over time.
Although the official COLA for 2026 will only be announced in October, early estimates suggest what retirees might expect.
But here’s the catch—while the 2026 COLA might offer a slightly higher raise, it may still not be enough to keep pace with the rising cost of living. Let’s break down what this means and why it could be a challenging year for senior citizens.
What Is the Estimated COLA for 2026?
The Senior Citizens League, a nonprofit group that focuses on older Americans’ issues, shares monthly estimates of next year’s COLA.
These predictions are based on data from the Consumer Price Index (CPI) and help us understand inflation trends, even though they are not official figures from the Social Security Administration (SSA).
As of July, the 2026 COLA estimate stands at 2.6%. Here’s how the monthly estimates have increased over the year:
Month – COLA Estimate
January – 2.1%
February – 2.3%
March – 2.2%
April – 2.3%
May – 2.4%
June – 2.5%
July – 2.6%
This upward trend shows that inflation is creeping up again, which is why the COLA estimates are rising too.
Why This Might Not Be Good News
At first, it sounds positive that Social Security payments might increase. However, COLA is tied to inflation—so a higher COLA usually means that prices are rising. And for retired people, a small bump in benefits might not be enough to handle the big jumps in everyday costs.
For example, food prices went up by almost 24% from 2020 to 2024, and transport costs rose by more than 34% in the same period, based on USDA data. Meanwhile, the average Social Security check is about $2,000 per month. A 2.6% increase would add only $52 per month, which may not help much when prices are climbing fast.
Even during 2023, when Social Security gave a record COLA of 8.7%, retirees only saw around $174 more per month. That’s better, but still not enough to cover everything when inflation hits hard.
Social Security Is Losing Buying Power
One of the biggest issues is that Social Security is slowly losing its ability to keep up with inflation. According to a 2024 report by The Senior Citizens League, Social Security benefits have lost about 20% of their buying power since 2010.
At the time of that report, the average retired worker was getting around $1,860 per month. But if benefits had kept the same value as in 2010, that monthly amount should have been $2,230. That’s a difference of around $370—a big amount for someone on a fixed income.
If this trend continues, it could become even harder for retirees to live comfortably using only Social Security.
How to Protect Your Retirement Income
Even though you can’t control inflation or change the COLA, there are steps you can take to protect your money.
If you’re still working and haven’t claimed Social Security yet, delaying your benefits can be a smart move. Waiting until your full retirement age (67) instead of claiming early at 62 can give you up to 30% more each month. And if you delay until age 70, you could get 24% to 32% more than you would at 67.
For those already retired, it’s a bit harder. But you can still look for ways to earn some extra income—maybe a part-time job, a small business, or some passive income through investments. Even a little extra savings can go a long way during tough times.
It’s also important to adjust your expectations. While it’s great that Social Security gives annual increases, it’s not always enough to cover all rising costs. Knowing the limitations of COLA can help you make smarter financial decisions and prepare better for the future.
Social Security COLAs are meant to protect retirees from inflation, but they are falling behind. Even with a 2.6% raise estimated for 2026, the real-world impact may be limited. Inflation continues to reduce the value of benefits, and without extra planning, many seniors may find it hard to manage their expenses.
It’s important to understand how COLA works and take action now—either by delaying retirement, increasing savings, or finding new income sources—to stay financially secure in the long run.
