Social Security beneficiaries could see a modest increase in their monthly payments in 2026. According to a June estimate by The Senior Citizens League and analyst Mary Johnson, the projected cost-of-living adjustment (COLA) for 2026 is now 2.5%, a slight bump from last month’s 2.4% projection. While this figure is far from final, it offers a useful snapshot of where things might be headed as inflation trends shape up through the rest of the year.
What Is COLA and Why Does It Matter?
The Cost-of-Living Adjustment (COLA) is an annual increase in Social Security payments designed to keep pace with inflation. It’s calculated using data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which tracks the price changes in goods and services.
Millions of retirees and disabled Americans rely on COLA to maintain their purchasing power. A lower COLA, especially during times of rising living costs, can severely impact seniors on fixed incomes.
The 2026 COLA Projection: 2.5%
As of June 2025, the COLA for 2026 is estimated at 2.5%, slightly up from 2.4% in May. This projection is based on the latest CPI-W data, which showed a 2.2% year-over-year increase in May. While modest, this adjustment could still translate into a noticeable difference in monthly benefits.
Here’s a quick look at how a 2.5% increase would impact the average monthly Social Security payment:
| Current Average Monthly Benefit (2025) | Estimated 2026 Benefit (+2.5%) |
|---|---|
| $1,907 | $1,954 |
| $2,500 | $2,562.50 |
| $3,000 | $3,075 |
What Could Change the Final COLA?
While the 2.5% estimate is based on current data, several factors could push the actual COLA higher or lower:
- Upcoming inflation data: There are still four months of CPI-W data to be released before the official COLA announcement in October.
- Tariff policies: If new tariffs under the Trump administration drive up prices, inflation—and therefore COLA—could rise.
- Federal workforce reductions: Some economists argue that the Bureau of Labor Statistics’ data collection has become less robust due to staffing cuts, which might affect the accuracy of inflation measurements.
Disconnect Between Data and Reality
Despite official inflation rates hovering around 2.4%, many retirees say they’re feeling a bigger squeeze. A recent survey by The Senior Citizens League found that 80% of older Americans believe their real-world inflation in 2024 was above 3%, highlighting a growing disconnect between government figures and lived experiences.
This has led to calls for reform in how inflation is calculated for COLA purposes. Shannon Benton, executive director of The Senior Citizens League, warned that relying on incomplete or modeled data “can cost seniors thousands over the course of their retirement.”
Looking Ahead
The final COLA for 2026 will be announced in October 2025, based on the average CPI-W readings from July, August, and September. Until then, monthly inflation reports will continue to shape expectations. If prices heat up through the summer, the projected COLA could rise. Conversely, if inflation remains subdued, the 2.5% increase may hold steady—or even drop slightly.
Social Security recipients should continue to monitor updates closely. Even small percentage changes in COLA can have a long-term impact on retirement income, especially for those living on tight budgets.
FAQs
When will the official 2026 COLA be announced?
The Social Security Administration will release the official COLA figure in October 2025.
How is COLA calculated?
COLA is based on the average inflation measured by the CPI-W for July, August, and September.
Will my benefit increase exactly by 2.5%?
Not necessarily. While the estimate is 2.5%, the final figure may differ depending on inflation data released through September.