What Retirees Need to Know: 2026 Social Security COLA Projection

Every year, Social Security benefits adjust upward via the Cost‑of‑Living Adjustment (COLA). That’s meant to help benefits keep pace with inflation. The official COLA for 2026 hasn’t been announced yet, but projections are already shaping expectations—and worries.

How COLA Is Decided

- The Social Security Administration (SSA) uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI‑W) for July, August, and September.

- The average change in CPI‑W for those months, compared with the same months a year earlier, determines the annual COLA.

- The SSA typically announces the COLA in mid‑October, and the increase kicks in with January benefits.

What Experts Are Predicting

Projections for the 2026 COLA vary. Here are some of the most common estimates:

• The Senior Citizens League (TSCL): 2.7% — TSCL has raised its forecast over several months.

• Mary Johnson (Social Security / Medicare policy analyst): 2.7%–2.8% — Based on latest inflation data.

• Alternative forecasts: 2.4% to 2.6% — Some estimates remain more conservative.

One of the more likely projections now is 2.7%, which would be a slight increase over 2025’s COLA of 2.5%.

What 2.7% Means in Dollars

If the COLA ends up around 2.7%, here’s what the boost might look like:

- Average retired worker benefit would go from about $2,008 to around $2,062, an increase of $54/month.

- But not everyone will see the full increase in their take‑home amount, due to Medicare and other deductions.

What Could Erase the Benefit

Even a positive COLA may fail to boost net income much, for some:

- Medicare Part B premium increase is expected to be large in 2026. It could absorb a good chunk of the COLA.

- Other health, housing, and transportation costs are rising faster than general inflation, putting pressure on budgets.

- Some deductions or withheld amounts (e.g., overpayments) could reduce the actual increase in check sizes.

Other 2026 Changes to Watch

- Full Retirement Age (FRA) increases: In 2026, those born in 1960 or later will have an FRA of 67.

- Social Security taxable wage cap: The maximum earnings subject to Social Security tax is set to rise.

- Earnings test thresholds: If you work while collecting benefits, limits and withholding rules may shift upward.

- COLA formula changes ahead: Starting December 2026 (or later), adjustments may use a measure more focused on elderly costs (CPI‑E) instead of CPI‑W.

What You Should Do

- Don’t count on COLA alone: Build backup income or savings.

- Estimate your new benefit, then subtract expected Medicare deductions.

- Monitor the October announcement closely.

- Adjust your budget early, given rising health and housing costs.

- If feasible, delay claiming benefits to maximize lifetime income.