Retirees across the United States are closely watching mid-October because the Social Security Administration (SSA) will announce the 2026 cost-of-living adjustment (COLA) on October 15, 2025.
This yearly adjustment is based on inflation data from the U.S. Labor Department, which will publish September’s inflation figures the same day.
Since Social Security benefits are a vital income source for millions of seniors, even small changes in COLA have a big impact. This year, the stakes are especially high as tariffs imposed by President Donald Trump have fueled inflation, and many Americans expect rising prices to continue.
COLA Forecast Rises Ahead of Official Announcement
The Senior Citizens League, the largest nonprofit group advocating for older Americans, has raised its 2026 COLA forecast throughout the year. Back in January, it predicted a 2.1% increase, but by September, the forecast climbed to 2.7%.
This revision has mixed implications for beneficiaries: there’s some good news and some bad news.
The Good News: COLA Will Be Higher in 2026
Each year, Social Security benefits are adjusted to help protect purchasing power against inflation. The SSA calculates COLA using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The formula is simple: the average CPI-W for the third quarter of the current year (July to September) is compared with the third quarter of the previous year. The percentage increase becomes the COLA for the next year.
For example, in 2024, the CPI-W rose 2.5%, so Social Security benefits increased by 2.5% in 2025. This time, the forecast suggests a 2.7% boost for 2026.
That means the average monthly Social Security benefit of $2,008 in August 2025 would rise to about $2,062. In practical terms, the average retiree would receive an extra $54 per month if the forecast holds true.
The Bad News: The COLA Still Falls Short
While a 2.7% raise sounds positive, many experts argue that the CPI-W does not reflect the real spending patterns of retirees. That’s because the CPI-W is based on workers’ expenses, which differ from seniors’ expenses.
Key differences include:
Housing: Retirees spend more than younger workers.
Medical care: Retirees spend significantly more.
Transportation: Retirees spend less than younger workers.
In 2025, the categories that matter most to seniors — housing and medical care — have risen faster than overall inflation. On the other hand, transportation, which is weighted too heavily in the CPI-W, has risen much slower.
Here’s the year-to-date increase through August 2025:
Overall CPI-W: 2.5%
Housing: 3.9%
Medical care: 3%
Transportation: 0.2%
This mismatch means the COLA will likely underestimate true inflation for retirees. So, even with a 2.7% increase, Social Security checks will not fully cover rising living costs, leaving seniors with less purchasing power.
History Is Repeating for Retirees
This situation is not new. In both 2024 and 2025, COLAs failed to keep up with real expenses faced by seniors, especially housing and healthcare. Surveys show that most retired workers found the recent adjustments insufficient. Unfortunately, 2026 looks set to follow the same trend.
The 2026 COLA announcement will bring a slightly larger increase than last year, offering some relief to retirees. However, because the calculation is based on the CPI-W — a measure that does not fully reflect senior spending habits — the adjustment will likely fall short of real inflation.
That means while retirees will see a small boost in monthly checks, their benefits may still lose purchasing power against rising costs. For millions of seniors, the COLA remains both a lifeline and a reminder of the ongoing challenge of keeping up with inflation.
