After years of sizeable boosts, Social Security’s 2026 cost-of-living adjustment (COLA) could be slipping into modest territory. New predictions suggest that next year’s increase may be just 2.4%, the lowest bump since 2021. This is big news for millions of retirees who rely on Social Security as their financial lifeline — and it might not be enough to keep pace with everyday expenses like rent, food, and medical care. If you’re counting on Social Security to help cover rising costs, here’s what you need to know right now about this shrinking raise.
Inflation Is Cooling — and So Are Your COLA Increases
According to the latest forecast from The Senior Citizens League, one of the nation’s leading nonpartisan advocacy groups for older Americans, the COLA for 2026 is projected to land at just 2.4%. That’s a step down from 2025’s already modest 2.5% increase, and a far cry from the historic 8.7% boost in 2023, which came during a period of runaway inflation.
What’s behind the slowdown? The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) — the formula used to calculate Social Security COLA — is showing signs that inflation is easing. As of April 2025, the CPI-W rose just 0.3% for the month and 2.1% over the past year. While that may sound like good economic news, it translates into smaller checks for seniors.
Seniors Say the Increases Aren’t Enough
For many Americans aged 65 and older, Social Security isn’t just a benefit — it’s the main source of income. In fact, 73% of seniors depend on it for at least half of their income, and a whopping 39% rely on it entirely.
That’s why there’s growing concern that these smaller COLA increases won’t keep up with the real cost of living. A recent survey by The Senior Citizens League found that 94% of respondents said this year’s COLA was not enough, and 1 in 5 seniors is now spending over $1,000 a month just on healthcare.
Although some prices, like prescription drugs, have shown signs of stabilizing, other key expenses — especially rent and car repairs — continue to climb. Seniors are feeling the pinch, and a 2.4% COLA may not stretch far enough.
Policy Moves and Tariffs Could Complicate the Picture
There are also larger economic and political forces at play. In an effort to combat high drug prices, former President Donald Trump recently signed an executive order requiring drug manufacturers to lower U.S. prices to match what’s charged internationally. That could ease the pressure on seniors’ budgets, but the long-term impact on COLA remains uncertain.
Meanwhile, new tariffs introduced in 2025 could end up raising the price of consumer goods. If that happens, inflation might tick back up — which could, in turn, affect the COLA calculation for 2026. It’s a delicate balancing act, and seniors are caught in the middle.
When Will We Know the Final COLA?
The official 2026 COLA announcement will come from the Social Security Administration in October 2025, after analyzing inflation data from July through September. Whatever adjustment is confirmed will go into effect starting January 2026.
Until then, beneficiaries are being encouraged to monitor inflation trends closely and plan conservatively for their 2026 finances. While the 2.4% increase is just a projection for now, it’s shaping up to be a reality many retirees will need to brace for.
