If you’re counting on a bigger Social Security check in 2026 to help with rising costs, you may want to adjust your expectations. The latest projection from the nonpartisan Senior Citizens League suggests that next year’s cost-of-living adjustment (COLA) could be just 2.4% — one of the smallest increases retirees have seen in recent years. With inflation cooling, your monthly benefits might not grow as much as you’d hoped, and that could have a real impact on your budget.
How Is the COLA Calculated Anyway?
Every fall, the Social Security Administration (SSA) reviews inflation trends to determine how much to boost benefits the following year. Specifically, they look at the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter — that’s July through September — and compare it to the same time period from the previous year.
If prices have gone up, Social Security recipients get a COLA to help keep up. But if inflation slows down — as it has in recent months — the COLA ends up being smaller. That’s exactly what’s happening now.
In 2025, beneficiaries received a 2.5% COLA, already a step down from the 8.7% increase in 2023. Now, if the 2.4% projection holds, it would be the lowest increase since 2021, when seniors only saw a 1.3% bump.
What Does a 2.4% Increase Actually Mean for You?
Let’s break it down. Suppose you’re receiving $1,800 per month in Social Security. A 2.4% COLA would add just $43 a month — not a huge help when grocery prices, rent, and out-of-pocket healthcare expenses continue to climb. Many seniors already feel like they’re falling behind, and a smaller-than-hoped COLA won’t help close that gap.
And remember: While COLA is designed to help protect your purchasing power, it doesn’t always fully reflect the spending patterns of older Americans. Things like Medicare premiums, which often rise faster than inflation, can easily eat up most or all of a COLA increase.
Why This Matters for Your Retirement Planning
For those living on a fixed income, COLA increases are more than just numbers — they’re a lifeline. A smaller increase in 2026 means many retirees will need to tighten their budgets even more or find new ways to stretch their dollars. That could mean postponing travel, cutting back on non-essentials, or even tapping into savings earlier than planned.
Financial experts advise that now is a good time to revisit your retirement plan. Consider speaking with a financial advisor, reviewing your healthcare coverage, and tracking your essential expenses closely. Every dollar counts — especially when your raise may not keep up with reality.
When Will the Final COLA Be Announced?
The official 2026 COLA figure will be released in October 2025, once the SSA has reviewed the full third-quarter CPI-W data. Until then, these estimates can shift — especially if inflation picks up again or if economic conditions change dramatically.
For now, however, retirees should brace for a modest increase and start preparing accordingly. Lower inflation might be good news for the economy, but for seniors relying on Social Security, it could mean tightening the belt just a little bit more next year.
