Decades ago, Social Security benefits didn’t automatically increase with inflation. Instead, Congress had to vote on raises for seniors. That changed in 1975, when automatic cost-of-living adjustments (COLAs) tied to inflation were introduced.
Since then, benefits have risen most years, depending on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). When the CPI-W goes up, benefits rise; when it’s flat or falls, benefits don’t change.
For millions of seniors, these annual COLAs have become critical for keeping up with rising expenses. And with inflation still a concern, many retirees are hoping for a bigger boost in 2026 than they received in 2025.
What the 2025 COLA Looked Like
The official 2025 COLA was 2.5%, based on third-quarter inflation data from 2024. While that meant slightly larger monthly checks, many seniors still found their bills increasing faster than their benefits.
For example, if your monthly benefit was around $2,000 in 2024, the 2.5% COLA added about $50 per month in 2025. But with food, gas, and healthcare costs often rising faster than that, many retirees felt the raise barely helped them stay afloat.
Early Outlook for 2026’s COLA
It’s still too soon to know the official number—the SSA won’t announce it until October 15, 2025—but early projections from the Senior Citizens League put the 2026 COLA at 2.7%.
That’s a bit higher than 2025’s raise, and if inflation trends upward in the next few months, the adjustment could climb further. On the surface, this sounds like good news for retirees—but there’s a catch.
Why a Bigger COLA Isn’t Always Good News
A larger COLA only means one thing: inflation is higher. Seniors may get a bigger check, but they’ll likely need it to cover higher costs at the grocery store, gas station, pharmacy, or utility companies.
This is why even with automatic increases, Social Security often struggles to keep pace with real-world inflation. According to retiree advocates, benefits have lost significant buying power since 2000—leaving many seniors in a financial squeeze despite annual adjustments.
What Seniors Can Do
While COLAs help, they can’t always keep up with the true cost of living. Seniors may need to:
Look for part-time work to supplement income.
Reevaluate budgets and focus on essentials.
Consider relocating to more affordable areas, if feasible.
Rely on personal savings or retirement accounts as a cushion.
Meanwhile, today’s workers should not assume Social Security will fully cover their retirement. Even small, consistent savings can provide much-needed backup when inflation outpaces COLAs.
The projected 2.7% COLA for 2026 may bring larger Social Security checks, but it also signals rising prices that could cancel out much of the benefit.
While COLAs are vital to keeping retirees afloat, they are not a perfect shield against inflation. Seniors may need to make adjustments, and younger workers should prioritize saving now to reduce dependence on Social Security later.
