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.

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?

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.