If you’re counting on a big Social Security raise in 2026, you may want to scale back your expectations. Experts are now warning that the upcoming Cost-of-Living Adjustment (COLA) could be one of the smallest increases in recent memory—possibly the lowest in five years. For millions of retirees already struggling to keep up with rising prices, this could be a financial gut punch.
A Cold Forecast: COLA Could Be as Low as 2.4%
Based on current inflation trends, financial analysts and groups like The Senior Citizens League are forecasting a 2026 COLA of just 2.3% to 2.4%. While that might sound like a decent bump, it’s actually less than 2025’s 2.6% increase, and a far cry from the historic 8.7% hike we saw in 2023.
In simple terms: if you’re living on a fixed income and watching grocery bills, rent, and medical costs steadily climb, a 2.4% raise isn’t going to stretch very far.
Why the Raise May Be Smaller Than You Hoped
The COLA is tied to inflation, specifically the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The Social Security Administration looks at inflation levels from July through September each year to set the next year’s increase.
While overall inflation has cooled compared to the sky-high rates of 2022 and 2023, essential goods like prescription drugs, insurance premiums, food, and rent haven’t exactly followed suit. This creates a painful mismatch: official inflation numbers go down, so the COLA shrinks, but your personal expenses might still be going up.
What’s at Stake for Retirees
This potential low COLA is more than just a number—it’s a real threat to retirement stability. Consider this:
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73% of retirees rely on Social Security for at least half of their income
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Nearly 4 in 10 seniors depend on it for all their income
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A smaller COLA could make it harder for retirees to cover basic needs
Experts warn that this gap between COLA increases and real-world expenses has already caused Social Security checks to lose over 36% of their buying power since 2000. A modest increase in 2026 could accelerate that decline.
The Timeline: When We’ll Know for Sure
The official 2026 COLA will be announced by the Social Security Administration in mid-October 2025. It’s based on the average inflation readings between July and September 2025, so until then, there’s still room for movement. But unless inflation suddenly spikes again, the outlook is not promising.
What Retirees Should Do Now
If you’re a Social Security recipient or planning to retire soon, here’s how you can prepare:
1. Budget conservatively: Assume a smaller increase and don’t overestimate your future income.
2. Track your expenses: Pay close attention to how much you’re spending on food, healthcare, housing, and transportation.
3. Stay informed: Watch CPI-W updates and expert forecasts heading into fall 2025.
4. Explore benefits and assistance programs: Supplemental help with housing, utilities, and prescriptions could help bridge the gap.
5. Consider additional income streams: If possible, part-time work or passive income can cushion the impact.
Final Thoughts: Don’t Let This Catch You Off Guard
Retirees hoping for another generous Social Security increase could be in for a rude awakening. With forecasts pointing to one of the smallest COLA raises since 2021, now is the time to rethink your retirement game plan. While inflation has slowed, the cost of living for seniors hasn’t—and that mismatch could stretch your budget thinner than ever in 2026.
