If you rely on Social Security, even a small increase can make a noticeable difference when the cost of groceries, healthcare, and fuel keeps shifting.

Each fall, the Social Security Administration announces the cost-of-living adjustment (COLA) for the upcoming year to help benefits keep pace with inflation.

The official 2026 figure won’t be available until October, but early projections are already drawing attention from retirees.

These estimates hint at a modest boost that could provide a little more financial breathing room.

Here’s what’s driving the forecast, how the COLA is calculated, and what it might mean for your monthly benefits.

Social Security’s yearly cost-of-living adjustment is designed to help benefits keep pace with rising prices. Image source: YouTube / Queen City News.

What COLA means for Social Security recipients

COLA, short for cost-of-living adjustment, is a yearly increase meant to keep benefits in step with inflation.

The Social Security Administration uses it to help maintain your buying power when the cost of everyday essentials goes up.

The new amount takes effect each January, with the decision based on inflation data from the summer before.

In 2025, recipients received a 2.5% increase.

Early analysis points to the 2026 adjustment coming in slightly higher if trends hold, though nowhere near the record 8.7% boost in 2023 when inflation surged.

Also read: After public pushback, Social Security revises its latest plan

How the figure is determined

The adjustment is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Officials average the index for July, August, and September, then compare it to the same period the year before.

The percentage change becomes the COLA for the following year.

If that three-month average comes out to be 2.7% higher than last year’s figure, benefits would rise by 2.7%.

While the calculation is straightforward in theory, shifts in inflation during those months can make a difference in the final number.

Also read: Are Social Security increases really keeping up with your expenses?

Why analysts are projecting a modest boost

According to July’s inflation data, the overall consumer price index is up 2.7% from last year, and the CPI-W is up 2.5%.

Policy analyst Mary Johnson and the Senior Citizens League—a nonpartisan advocacy group—both expect the 2026 COLA to land around 2.7%.

But the estimate could still change.

Factors like new tariffs on certain household goods have begun pushing prices slightly higher, which could lift the final number if the trend continues.

On the other hand, if inflation cools in August and September, the adjustment might come in lower.

Source: YouTube / Financial Fast Lane​

Also read: Will your benefits keep up? What to know about the 2026 COLA

How this compares with past increases

Over the past two decades, the average COLA has been 2.6%.

A 2.7% adjustment would fit that long-term pattern.

There have been years with no increase at all—such as 2010, 2011, and 2016—and years with larger jumps when inflation spiked.

The goal is to provide steady, predictable support, even if the increases aren’t dramatic.

Also read: Social Security Scrutiny grows as senator warns of concealed systemic problems

What it could mean for your benefits

Right now, the average Social Security retirement benefit is about $1,900 per month.

If the adjustment does come in at 2.7%, that would add roughly $51 a month, or about $612 over the year.

For couples receiving benefits, the increase could be more noticeable.

It’s not a windfall, but it’s enough to help with rising bills or set aside for unexpected expenses.

Also read: Boost your Social Security income in retirement with these three smart strategies

Ways to prepare now

1. Mark the date: The official announcement is expected in October, with changes taking effect in January 2026.
2. Check your budget: Even a modest increase can be useful—consider how to put it to best use.
3. Beware of scams: The SSA will never call unexpectedly to request payment or personal details.
4. Get involved: Advocacy groups are pushing for adjustments based on the Consumer Price Index for the Elderly (CPI-E), which may better reflect retiree spending.

Source: YouTube / EWTN​

While any increase helps, many retirees say current COLA calculations don’t fully cover rising costs for essentials like healthcare, housing, and long-term care.

Until there’s a change in how the figure is calculated, the annual adjustment will remain an important—if imperfect—tool for helping benefits keep up with inflation.

Read next: Thinking of working in retirement? Here’s where seniors are thriving

Key Takeaways

• Analysts currently project the 2026 Social Security cost-of-living adjustment at about 2.7%, slightly above this year’s 2.5% increase.
• The official number will be based on inflation data from July, August, and September and will be announced in October.
• Over the past 20 years, the average COLA has been 2.6%, making the current projection consistent with historical trends.
• Inflation changes in the next two months—potentially affected by tariffs—could still shift the final percentage up or down.

What’s your take on the projected increase? Would it help your household budget, or do you think more needs to be done to protect retirees’ purchasing power? Share your perspective with our community!

 

[janmutch]

Of course any increase is welcome. But while the COLA is about 2.7, I've heard Medicare is going up 11%. If true, where will we get the 8+% to make up the difference? My payment went down last time because of the increase.

 

[ajsiciliano]

This is good to know. I also wish that the SSA would eliminate the high end income limit on SS paycheck deductions. Back in my working days, I had four years where the SSA stopped taking deductions from my paychecks by about November/December. Eliminating that limit would definitely help keep the SSA from going insolvent in a few years, this keeping them from having to cut into our monthly checks. No one making well over 100k per annum will go broke by enacting this policy.

 

[Samcmillen]

2.7% is not a cost of living adjustment. It is just enough to pay for the increase in Medicare.

 

[NIBOR0]

My concern is that you get the increase and it puts you over the income limit for medicaid which is currently my only health insurance. It's certainly not a win if that were to happen. I will turn 65 in March so I will have to deal with the Part B deductible. My husband just turned 65 last March and we got hit with the Part B premium. We got luckly in that our income is so low, the state is picking up the premium.

 

[Judyacidera]

2.7% is not a cost of living adjustment. It is just enough to pay for the increase in Medicare.

Unless Medicare goes up higher... Possible 8%+ increase in Medicare.. so your dollars will not even go as far as they go now!!

 

[Veronica E.]

Of course any increase is welcome. But while the COLA is about 2.7, I've heard Medicare is going up 11%. If true, where will we get the 8+% to make up the difference? My payment went down last time because of the increase.

You make a great point—rising Medicare premiums can definitely eat into any COLA increase. The 2026 Medicare Part B premium rates haven’t been finalized yet, but if they do go up significantly, many retirees could see little to no net gain in their monthly checks. It’s one of the reasons advocacy groups continue to push for changes to how COLA is calculated, so it better reflects real-world costs for older adults.

 

[Veronica E.]

This is good to know. I also wish that the SSA would eliminate the high end income limit on SS paycheck deductions. Back in my working days, I had four years where the SSA stopped taking deductions from my paychecks by about November/December. Eliminating that limit would definitely help keep the SSA from going insolvent in a few years, this keeping them from having to cut into our monthly checks. No one making well over 100k per annum will go broke by enacting this policy.

That’s a really interesting point, and one a lot of people share. Lifting or removing the income cap could definitely bring in more funding for Social Security, and it’s something lawmakers have debated for years. It’ll be worth watching to see if this idea gains more traction in the next few sessions of Congress.

 

[Veronica E.]

2.7% is not a cost of living adjustment. It is just enough to pay for the increase in Medicare.

I hear you—many people feel the same way when the COLA ends up getting absorbed by higher Medicare costs. It can be frustrating when the increase doesn’t really translate to more money in your pocket. Hopefully, future adjustments will better account for seniors’ actual expenses. Do you think tying the COLA to a senior-specific cost index would help?

 

[Veronica E.]

My concern is that you get the increase and it puts you over the income limit for medicaid which is currently my only health insurance. It's certainly not a win if that were to happen. I will turn 65 in March so I will have to deal with the Part B deductible. My husband just turned 65 last March and we got hit with the Part B premium. We got luckly in that our income is so low, the state is picking up the premium.

That’s a very real concern, especially with how even small income changes can affect Medicaid eligibility. It’s good that the state is covering your husband’s Part B premium—that can be a big help. Hopefully your transition to Medicare in March goes smoothly.