Every dollar counts these days—especially for Americans who rely on a fixed income to get through each month. Any news about a possible increase in benefits always grabs attention, especially when it could affect something as vital as Social Security.

Recent estimates are pointing to a slight shift in next year’s cost-of-living adjustment. But while any extra amount might seem helpful, the bigger picture reveals a more complicated story about what’s causing it—and why retirees are still being left behind.

A look at COLA and how it’s calculated​

The Cost-of-Living Adjustment, or COLA, is meant to help Social Security recipients keep pace with inflation. It’s essentially a yearly increase based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.

However, that formula doesn’t reflect how most seniors actually spend their money. The CPI-W focuses more on costs that affect working-age Americans—like education and transportation—rather than the medical care and shelter that matter more to retirees.

Recent estimates are pointing to a slight shift in next year’s cost-of-living adjustment. Image Source: Kaboompics.com / Pexels

COLA history shows years of stagnation​

Before 1975, Congress manually approved any benefit increases, and retirees sometimes waited years without any raise at all. Since tying COLA to the CPI-W, annual adjustments became routine—but not always helpful.

There were even three years in the 2010s where no COLA was issued at all.

Recent COLAs have improved—but not by much​

The inflation surge during the pandemic years led to some of the largest COLAs in decades:

• 5.9% in 2022
• 8.7% in 2023
• 3.2% in 2024
• 2.5% projected for 2025

These increases are well above the 2.3% average since 2010. However, they still haven’t fully compensated for the steady rise in costs that hit seniors the hardest.

Also read: Shocking COLA update: Why half of retirees are rethinking their plans!

Why the 2026 COLA might tick up again​

Estimates for 2026’s COLA are now leaning higher due to what’s being called a “Trump bump.” Policy changes involving tariffs and trade are expected to slightly increase inflation, and when prices go up, COLA often follows. Originally, both The Senior Citizens League (TSCL) and analyst Mary Johnson predicted a 2.2% COLA for 2026. After the May inflation report, they each revised their forecast upward to 2.5%.

That small increase could mean a bit more each month. If the 2.5% estimate holds, the average retired worker could receive an extra $50 per month in 2026. Workers with disabilities might see $40 more, and survivor beneficiaries could get around $39 extra.

Also read: Will your Social Security check grow in 2026? New COLA forecast just dropped—here’s what it could mean for you

This small bump isn’t solving the bigger problem. Despite five years of above-average increases, retirees’ purchasing power has dropped by 20% since 2010, according to TSCL.

That’s because critical expenses like shelter and medical care continue to rise faster than COLA. The Bureau of Labor Statistics reported a 3.9% annual increase in shelter costs and a 3% rise in medical care services—both outpacing the 2.5% COLA estimate.

Why CPI-W isn’t cutting it for seniors? The CPI-W was never designed with retirees in mind. It measures the habits of working Americans, not people who are no longer in the workforce. That means less weight is given to healthcare, housing, and other essentials that dominate a senior’s budget.

Read next: Could tariffs boost or shrink your Social Security COLA?

Key Takeaways

• Social Security’s 2026 COLA is now projected to increase by 2.5%, slightly up from earlier estimates due to President Trump’s tariff and trade policies.
• The average retired worker may see $50 more per month, while disabled workers and survivors may get $40 and $39 more, respectively.
• Despite five years of higher-than-average COLAs, retirees’ buying power has fallen by 20% since 2010 due to rising costs in shelter and healthcare.
• The CPI-W used to calculate COLA doesn’t reflect the real spending habits of retirees, resulting in benefit increases that lag behind actual inflation.

Are you feeling the pinch, even with the recent COLA increases? What tips do you have for stretching your benefits further? Let’s hear your stories, advice, and concerns in the comments. The GrayVine community is here to help each other navigate these uncertain times.

 

[nitram]

Once again try to mislead your intelligent readers by gas lighting about inflation. The truth is inflation is going down, your claim is false, tariffs have not caused inflation.

I find it offensive that you would continue to gaslight the majority of your readers with liberal falsehoods.

The majority of us voted for Trump, try and respect us.

 

[KC5FM]

Once again try to mislead your intelligent readers by gas lighting about inflation. The truth is inflation is going down, your claim is false, tariffs have not caused inflation.

I find it offensive that you would continue to gaslight the majority of your readers with liberal falsehoods.

The majority of us voted for Trump, try and respect us.

Try to respect this voter.

What choice did we have to NOT vote for Trump?

The reality is that, inflation, regardless of cause, is going to be apparent to the Senior population. For example, a hail storm in my community, just this month, damaged a roof of of a senior on social security. That family has immediate inflation woes because they have no insurance and, likely, will have to take out a loan to pay for repairs.

Look at the preliminary "Big Beautiful Bill" release from the Congressional Budget Office. For two years, there is a reprieve from cost of living but that ends and 10- 20- 30 year projections indicate the budget deficit is worse than it is now.

Please don't accuse me of being liberal. I likely as as conservative than you, perhaps even more so. If i AM more liberal than you, at least I am connected to reality.

Be blessed.

 

[Arkie98]

all it does is cause Medicare to go up. I remember the year it took a 17% increase. But i guess every little bit helps in some way.

 

[tlm]

all it does is cause Medicare to go up. I remember the year it took a 17% increase. But i guess every little bit helps in some way.

I couldn't agree more!! As I was reading the article, it reminded me of how I've thought for many, many years. We've been fooled when politicians would proclaim "TAX CUT", believing it would mean more money in our pockets. When I was working for the State, it seemed like such good news. You'd get maybe, at tops, an extra $15-$20 a month. Then health insurance premiums would increase more than the tax cut helped, deductibles and co-pays got higher as well. The same goes for Social Security. As seniors, any extra money is a godsend, and for a month or two, you get a sense of relief. Then you get the notice Medicare premiums are increasing. We are far behind where we should be anyway in terms of COLA. As stated in the article, COLA is based on the Consumer Price Index of Urban Wage earners and Clerical Workers, not the costs retirees are faced with. While reading the article, I was thinking of contacting AARP to see if they could advocate for seniors catching up to what we should actually be receiving per month as well as if Medicare premiums increase, we also get that amount included with COLA. In the State I live in, it is fruitless to contact sens. and house members about these issues as all of them are repubs.

 

[tlm]

Once again try to mislead your intelligent readers by gas lighting about inflation. The truth is inflation is going down, your claim is false, tariffs have not caused inflation.

I find it offensive that you would continue to gaslight the majority of your readers with liberal falsehoods.

The majority of us voted for Trump, try and respect us.

I am going to try responding to your comment as gracefully as possible. This is a quote from the Federal Reserve, "inflation remains somewhat elevated, they said — and it is likely to worsen: They lifted their forecast for the pace of price growth in 2025 from 2.7% to 3%, while overall economic growth is now likely to fall to 1.4% from a previous forecast of 1.7%." Economics are based on future predictions. With the person occupying the Oval Office, at present anyway, not only has America's economy been in a state of chaos, it has affected the world economy as well. The unpredictability of "his" policies has thrown off all the important factors that determine economics. It is too lengthy to discuss here but you might want to read more info. from reliable, non-partisan sources, to get an accurate picture. It refers to businesses expanding or even starting up, investments at home and from abroad, U.S. Bond markets, Wall Street, etc. The most negative factor regarding economics is unpredictability, that that is where the U.S. stands at this time, with the tariff situation fluctuating almost daily. As far as the majority voting for trump, those voters completely ignored valid evidence and statistics from experts who predicted the outcome if trump was elected. Well-respected and upstanding people spoke up to inform America who trump really was and what he would try to do if elected. The rest of his policies have destroyed the once respected and high regard for the U.S., and left us with no allies, he is having people arrested in huge groups and deported, he has made directives completely against the Constitution, he is ignoring Court Orders, he is, as he has always done, repeatedly lying about every situation possible, he gives speeches that are incoherent and inappropriate, he is violating rules and principles at his own discretion, and I could list so many more instances of corruption and his abuse of office. He is a convicted felon and manipulated the court system to his advantage in order to escape the consequences of his guilty conviction and to dismiss the other cases filed against him. I can refer you to articles in Wikipedia that provide a more detailed accounting. Here are just a few titles in Wikipedia you might want to review. "Personal and Business Legal Affairs of Donald Trump"; "Donald Trump Sexual Misconduct Allegations";"Business Career of Donald Trump"; "Donald Trump and Fascism". You can search under "Donald Trump" in Wikipedia and it will give you more listings. After reading just the documents I've provided for you, ask yourself if you still think the other half of the people in the U.S. should, "try and respect us?"

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