Social Security beneficiaries might receive a higher-than-expected cost-of-living adjustment (COLA) in 2026, thanks to the impact of new tariffs imposed by former President Donald Trump. While a bigger COLA sounds like good news, it may actually come with some financial stress for retirees in 2025.
Here’s a breakdown of how these changes affect Social Security payments — and what you should prepare for.
Why the 2026 COLA Is Likely to Be Higher
Social Security gives recipients an annual COLA to keep up with inflation. This adjustment is based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), calculated from July to September each year.
In 2024, the CPI-W increased by 2.5%, so the 2025 COLA was also 2.5%.
In 2025, after President Trump imposed a 10% baseline tariff on goods from multiple countries in April, inflation began to rise again.
CPI-W rose from 2.1% in April to 2.5% by July, and it may continue rising.
Because of this spike, the Senior Citizens League (TSCL) has raised its 2026 COLA forecast five times, from 2.2% in March to 2.7% in August.
This potential increase — called by some a “Trump bump” — means retirees could receive more money in 2026 than expected.
What This Means for Retirees
At first glance, a 2.7% COLA may sound like a win. However, there are two key issues:
- COLA only adjusts for past inflation
It doesn’t help during the year when prices are rising. So seniors may struggle through the rest of 2025, paying higher prices without extra income to cover it. - COLA may fall short if inflation continues after September
Since the 2026 COLA is based only on data from July to September, any inflation that continues after September will not be included. That means your 2026 raise may not match real-life costs.
Forecasted Social Security Benefits for 2026
If the 2.7% COLA estimate holds, here’s how it could affect monthly Social Security payments:
| Beneficiary Type | Average Benefit Before COLA | After 2.7% COLA | Monthly Increase |
|---|---|---|---|
| Retired Workers | $2,007 | $2,061 | $54 |
| Spouses | $954 | $980 | $26 |
| Survivors | $1,574 | $1,617 | $43 |
| Workers with Disabilities | $1,582 | $1,625 | $43 |
So, for example, the average retired worker would receive $648 more annually, or $54 extra per month, starting January 2026.
But if inflation keeps rising after September, seniors may feel like their increased payment still isn’t enough to keep up with daily expenses.
Tariffs and Their Broader Impact on Seniors
Shannon Benton, Executive Director of TSCL, said:
“Placing broad-based tariffs on goods from numerous countries could have a profoundly negative impact on the daily lives of seniors.”
Economists agree — while COLA might rise in response, it doesn’t prevent financial hardship during inflationary periods. Retirees are especially vulnerable because they often live on fixed incomes.
The Hidden $23,760 Social Security Bonus and Retirement Mistakes
Many Americans miss out on strategies that could increase their Social Security benefits. There are little-known tips and “secrets” that can help you:
Maximize lifetime income
Reduce taxes in retirement
Avoid early claiming penalties
Delay benefits to earn more later
Some experts say that following the right strategies could result in as much as $23,760 in extra Social Security benefits over time. It’s worth speaking to a financial advisor or using trusted SSA tools to review your options.
The 2026 Social Security COLA is expected to be 2.7%, driven by inflation that rose following new tariffs introduced by President Trump. While this “Trump bump” could bring higher monthly payments, retirees may still feel financial pressure throughout 2025, as inflation rises faster than benefits can adjust.
