If you’re relying on Social Security to make ends meet, there’s a modest increase on the horizon. In 2026, monthly benefits are projected to rise by 2.5%, giving the average retiree about $50 more per month. But before you get too excited, experts warn: this small bump may not be enough to cover the rising cost of everyday essentials like food, housing, and medical care.
The projected increase follows a similar 2.5% raise in 2025 and reflects slower inflation. While it’s a far cry from the record-high 8.7% boost retirees saw in 2023, it’s still a welcome addition—especially for seniors living on fixed incomes. That said, it’s only part of the bigger financial picture.
What a 2.5% COLA Actually Means for You
Let’s break it down: if you’re currently receiving the average Social Security benefit of around $2,052 per month, the 2.5% Cost-of-Living Adjustment (COLA) would raise that to about $2,102. That’s roughly $600 more over the course of a year.
For those with lower monthly checks, say $1,200 a month, a 2.5% increase amounts to just $30 more per month. That could cover a couple of grocery trips—but not much else in today’s economy.
Why the Raise Feels Smaller Than It Sounds
The reason for this smaller bump? Inflation has cooled compared to previous years. In 2022 and 2023, COLAs were pushed higher due to the rising costs of nearly everything. But as inflation tapers off, the annual adjustment has dropped too. Here’s how recent COLAs have compared:
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2022: 5.9%
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2023: 8.7%
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2024: 3.2%
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2025: 2.5%
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2026 (projected): 2.5%
While that might look like progress on paper, many seniors say their costs haven’t dropped. In fact, many critical expenses—like prescription drugs, rent, home heating, and groceries—have kept climbing, making it hard for a small raise to keep up.
What Could Still Change Before 2026
Keep in mind: this 2.5% figure is still a projection. The official COLA for 2026 won’t be finalized until October 2025, when the Social Security Administration reviews inflation data from the third quarter (July through September). If inflation spikes this summer, the final increase could end up higher. On the flip side, if inflation remains flat or drops, the COLA could shrink.
There’s also concern about the accuracy of the data itself. Due to funding and staffing issues, the Bureau of Labor Statistics has scaled back some of its data collection, which raises questions about whether the Consumer Price Index (CPI-W) truly reflects the spending habits of older Americans.
What You Should Do Right Now
Here’s how to prepare for the 2026 COLA and protect your finances:
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Don’t overestimate your raise. Assume a 2.5% bump and plan your budget accordingly.
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Track your expenses. Knowing where your money goes helps you manage tighter margins.
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Look into supplemental programs. You may qualify for food, housing, or healthcare aid.
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Consider alternate income. Part-time work, annuities, or retirement withdrawals can bridge gaps.
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Monitor official updates. Follow trusted sources like SSA.gov for October’s official COLA decision.
The Bottom Line
While a 2.5% COLA increase in 2026 is better than nothing, it may feel underwhelming in the face of real-world inflation. For many retirees, it’s a reminder that even small raises need to be paired with smart budgeting and outside resources. Keep an eye on inflation trends this summer, because the final number could still shift—and your benefits with it.
