The number sounds small, but for millions of retirees it matters. Early projections suggest Social Security beneficiaries could see a 2.7% cost-of-living adjustment (COLA) in 2026—slightly higher than the 2.5% bump they got in 2025. Not a jackpot, sure, but it’s a raise meant to keep benefits from losing buying power as prices creep up.
This estimate comes from both Mary Johnson, a longtime Social Security and Medicare policy analyst, and the Senior Citizens League (TSCL), a nonpartisan advocacy group for older Americans. They’re basing it on the latest July inflation numbers from the Bureau of Labor Statistics (BLS).
Two more months of inflation data will ultimately seal the deal when the Social Security Administration (SSA) makes its official announcement in October 2025. Until then, this is the best educated guess we’ve got.
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How the Social Security COLA Is Calculated
Every October, the SSA takes a close look at inflation using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)—a more specific cousin of the broader CPI. Here’s how it works:
- Take the average CPI-W reading from July, August, and September of the current year.
- Compare it to the average for the same three months of the previous year.
- The percentage increase becomes next year’s COLA.
So if inflation over those three months averages 2.7% higher than last year, benefits get a 2.7% boost.
Historical Context: Over the past 20 years, COLAs have averaged 2.6% according to TSCL. That means this year’s estimate is almost exactly on trend—no fireworks, but no shrinkage either.
| Year | COLA (%) | Inflation Trend | Notes |
|---|---|---|---|
| 2023 | 8.7 | High | Post-pandemic inflation peak |
| 2024 | 3.2 | Cooling | Prices still elevated for essentials |
| 2025 | 2.5 | Stable | Near long-term average |
| 2026 (est.) | 2.7 | Steady | Based on July CPI-W data |
Why Tariffs Might Tweak the Numbers
Interestingly, new tariffs have already nudged prices up in certain categories like household furnishings and supplies. So far, their effect on overall inflation has been mild. But if they bite harder in August or September, they could slightly raise the final COLA.
On the flip side, if inflation stalls or dips, the bump could be smaller. This is why TSCL is projecting 2.6% while Johnson’s estimate is 2.7%—it all comes down to the next two months of data.
What a 2.7% COLA Means in Dollars
Let’s put it in practical terms. The average monthly Social Security retirement benefit in 2025 is about $1,915. A 2.7% increase would add roughly $52 a month—or about $624 a year.
That’s enough to cover:
- Two weeks of groceries for a single person in many states
- One month of a basic Medicare Part D prescription plan
- Part of a winter heating bill
Still, rising costs for essentials like housing, medical care, and food often outpace general inflation—so many retirees won’t feel much richer.
Fact Check
This projection is based on actual July 2025 inflation data from the BLS, not rumor or speculation. Both the Senior Citizens League and Mary Johnson publish these estimates monthly as new CPI-W numbers come in. The official COLA announcement will come from the SSA in October 2025. Until then, the 2.7% figure is not final—it’s an informed forecast.
FAQs
When will the 2026 COLA be officially announced?
In October 2025, after the SSA has August and September CPI-W data.
Will every Social Security beneficiary get the 2.7% increase?
Yes, if that’s the final number—but it applies to the gross benefit, and Medicare premiums may offset part of the raise for some.
How does CPI-W differ from regular CPI?
CPI-W focuses on wage earners and clerical workers, weighting expenses differently than the broad CPI, which covers all urban consumers.
Could the 2026 COLA be higher than 2.7%?
Possibly, if August and September inflation are unexpectedly high.
Has the COLA ever been zero?
Yes—in 2010, 2011, and 2016, when inflation was flat or negative.
