Social Security 2026 COLA Forecast: Discover Next Year’s Benefit Increase
Analysts are adjusting their forecasts for the Social Security 2026 Cost-of-Living Adjustment (COLA) as inflation levels fluctuate. The ongoing government shutdown, which began in early October, is complicating matters. Still, the Social Security Administration (SSA) is expected to announce the official COLA on October 24, despite the government’s temporary closure.
Current Inflation Trends Affecting Social Security
Social Security benefits receive an annual COLA to maintain purchasing power. The adjustment is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) during the third quarter from July to September. This year’s inflation measurements have increased due to various economic factors, including recent tariffs implemented during the Trump administration.
COLA Calculation Methodology
The COLA is calculated using the following formula:
- The CPI-W reading for the third quarter of the current year is divided by the CPI-W reading from the same quarter of the previous year.
- The result is rounded to the nearest tenth of a percent, which becomes the COLA for the following year.
For example, a CPI-W increase of 2.5% in the third quarter of 2024 led to a 2.5% COLA for 2025.
Forecasts for 2026 COLA Increase
The Senior Citizens League (TSCL), a nonpartisan advocacy group, initially projected a 2.1% COLA for 2026. Their forecast has since been adjusted to 2.7%. Independent analyst Mary Johnson has similarly raised her estimate from 2.1% to 2.8% since February.
These increases in projections are primarily attributed to heightened inflation, which is reported at 2.9% as of August, a significant rise from 2.3% in April. The Budget Lab at Yale indicates that the average effective tax on U.S. imports has surged to 16.7%, the highest since 1936, due to tariffs.
Projected Increases for Retired Workers
Based on current forecasts, retirees can expect the following changes in their Social Security benefits for 2026:
| Benefit Type | Average Benefit Before COLA | Average Benefit After 2.7% COLA | Average Benefit After 2.8% COLA | Additional Income in 2026 |
|---|---|---|---|---|
| Retired Worker | $2,008 | $2,062 | $2,064 | $54 to $56 |
| Spouse | $955 | $981 | $982 | $26 to $27 |
The adjustments in benefits reflect not only the COLA but also broader economic trends impacting Social Security finances.
Looking Ahead
Retirees are encouraged to review the Social Security COLA details once announced. Notices will be mailed in December and will be available through the my Social Security portal. These notifications will include updated benefit amounts and deductions for the upcoming year.
In summary, the Social Security 2026 COLA is projected to be between 2.7% and 2.8%. This adjustment aims to help retirees navigate inflationary pressures and sustain their purchasing power going forward.
