In July, the average Social Security check for retired workers was $2,006.69, providing a vital source of income for over 53 million retirees. While this figure might seem modest, it remains essential for many seniors to meet their financial needs.
Over the past 24 years, Gallup’s surveys have consistently shown that 80% to 90% of retirees consider Social Security a necessity for covering their living expenses.
The most anticipated event for retirees each year is the announcement of the cost-of-living adjustment (COLA), which helps Social Security payments keep pace with inflation. As we approach the 2026 COLA, projections are starting to narrow, and while an increase is expected, it may not be as substantial as many hope.
The Role and Calculation of Social Security’s COLA
The COLA is designed to help retirees keep up with rising costs. If inflation causes prices to rise by 3%, for instance, Social Security benefits would need to increase by a corresponding amount to prevent beneficiaries from losing buying power.
Before 1975, COLA increases were set by Congress, sometimes with drastic changes (such as the massive 77% COLA in 1950).
Since 1975, the COLA has been tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a measure of inflation based on more than 200 categories.
However, the CPI-W doesn’t fully reflect the spending habits of retirees, particularly in areas like healthcare and housing, which seniors tend to spend more on. The COLA is based on the CPI-W data from July, August, and September each year.
What to Expect in 2026
For the past few years, Social Security COLAs have been higher than average, thanks to the surge in inflation during the COVID-19 pandemic. From 2022 to 2025, retirees saw COLA increases of 5.9%, 8.7%, 3.2%, and 2.5%, respectively. The 8.7% increase in 2023 was the highest in 41 years.
Looking ahead to 2026, projections suggest a 2.7% COLA increase. This adjustment would add $54.18 to the average monthly payout of $2,006.69, bringing the annual benefit to just over $24,700.
For workers with disabilities, the 2.7% COLA would add $42.72 to their monthly check, bringing their average payout to about $1,625. Survivor beneficiaries would see a similar increase, with their monthly check rising by approximately $42.51 to $1,617.
Why the 2026 COLA May Not Be Enough
While a 2.7% COLA might sound positive, retirees may still feel disappointed. The CPI-W, which is used to calculate the COLA, doesn’t fully account for the unique spending patterns of seniors.
Retirees tend to spend a larger share of their income on shelter and medical care—two categories that have seen significant inflation in recent years. As a result, the purchasing power of Social Security checks has declined by about 20% since 2010.
Additionally, the 2026 COLA may be further eroded by rising Medicare premiums. The Part B premium, which covers outpatient services, is expected to rise by 11.5% to $206.20 per month in 2026. This increase could offset much, if not all, of the 2.7% COLA for many beneficiaries.
Strategies for Boosting Retirement Income
Given the challenges associated with Social Security, many retirees may find themselves falling short despite the COLA increase. The key to securing a more comfortable retirement may be reducing reliance on Social Security by saving more in retirement accounts such as IRAs or 401(k)s.
Those already retired may need to consider other options, such as withdrawing more from their savings or even working part-time.
In addition, retirees can take advantage of little-known Social Security strategies that could help boost their retirement income. For example, with proper planning, retirees can potentially receive up to $23,760 more annually by optimizing their Social Security benefits.
