Trump’s new tariffs could bring bigger Social Security checks—but there’s a catch
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If you’ve been watching the news, you’ve likely heard about the latest round of tariffs announced by President Trump.
At first glance, trade policy might seem far removed from your Social Security check—but it’s not.
These new tariffs could quietly shape how much money lands in your account next year.
For millions of retirees, the outcome could mean a bigger check—but not necessarily more spending power.
President Trump’s new 10% global tariff, along with even higher “reciprocal” tariffs on certain countries, has already started to push up prices on everything from electronics to groceries.
Now, here’s where it gets interesting for Social Security recipients: The annual cost-of-living adjustment (COLA) for Social Security is directly tied to inflation.
The higher the prices go, the bigger the COLA. For the 70 million Americans who rely on Social Security, that means their monthly benefit could get a boost starting in 2026.
That’s a bit higher than the average in recent years, and it’s directly linked to the inflation caused by these new tariffs.
So, if you’re watching your grocery bill climb and your utility costs inch up, you can at least take some comfort in knowing that your Social Security check is likely to rise as well.
For many, that extra money can help cover the basics—especially as prices for essentials continue to rise.
Also read: Social Security after retirement: 6 Smart moves to make
Why? Because the same inflation that’s driving up your COLA is also eating away at your buying power—sometimes before that bigger check even hits your account.
Here’s how it works: The COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the previous year.
That means the adjustment is always a little behind the curve. You spend months paying higher prices, and then you get a retroactive “raise” that might only cover 70-80% of what you’ve already lost to inflation.
And there’s another catch: Higher Social Security benefits often mean higher Medicare Part B premiums, which are automatically deducted from your check. So, that “bump” can shrink before you even see it.
As Ryan puts it, “You’re basically watching your left pocket give money to your right pocket while inflation picks both.” In other words, it’s not a windfall—it’s just a way to help you keep up, not get ahead.
That puts additional stress on the already-strained trust fund, raising questions about the long-term sustainability of the program.
And while your check might go up, so do your expenses—especially for healthcare. Medicare premiums have been rising faster than inflation, which means that even a bigger Social Security check might not be enough to cover all your increased costs.
Have you noticed prices going up at the store? Do you feel like your Social Security check is keeping up with your expenses—or falling behind? What strategies have you used to stretch your budget in these inflationary times?
At first glance, trade policy might seem far removed from your Social Security check—but it’s not.
These new tariffs could quietly shape how much money lands in your account next year.
For millions of retirees, the outcome could mean a bigger check—but not necessarily more spending power.
Tariffs, Inflation, and Your Social Security: What’s the Connection?
Tariffs are essentially taxes on imported goods. When the government slaps a tariff on products from other countries, it usually means those items get more expensive for American consumers.President Trump’s new 10% global tariff, along with even higher “reciprocal” tariffs on certain countries, has already started to push up prices on everything from electronics to groceries.
Now, here’s where it gets interesting for Social Security recipients: The annual cost-of-living adjustment (COLA) for Social Security is directly tied to inflation.
The higher the prices go, the bigger the COLA. For the 70 million Americans who rely on Social Security, that means their monthly benefit could get a boost starting in 2026.
The Upside: A Potentially Bigger Check
According to early predictions from The Senior Citizens League (TSCL), the COLA for 2026 could land somewhere between 2.7% and 2.9%.That’s a bit higher than the average in recent years, and it’s directly linked to the inflation caused by these new tariffs.
So, if you’re watching your grocery bill climb and your utility costs inch up, you can at least take some comfort in knowing that your Social Security check is likely to rise as well.
For many, that extra money can help cover the basics—especially as prices for essentials continue to rise.
Also read: Social Security after retirement: 6 Smart moves to make
The Downside: The “Raise” That Isn’t Really a Raise
But before you start planning a big celebration, let’s talk about the other side of the coin. As Michael Ryan, a finance expert, puts it, “The ‘Trump bump’ is the cruelest kind of ‘raise.”Why? Because the same inflation that’s driving up your COLA is also eating away at your buying power—sometimes before that bigger check even hits your account.
Here’s how it works: The COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the previous year.
That means the adjustment is always a little behind the curve. You spend months paying higher prices, and then you get a retroactive “raise” that might only cover 70-80% of what you’ve already lost to inflation.
And there’s another catch: Higher Social Security benefits often mean higher Medicare Part B premiums, which are automatically deducted from your check. So, that “bump” can shrink before you even see it.
As Ryan puts it, “You’re basically watching your left pocket give money to your right pocket while inflation picks both.” In other words, it’s not a windfall—it’s just a way to help you keep up, not get ahead.
What About the Social Security Trust Fund?
There’s another wrinkle to consider. As Kevin Thompson, CEO of 9i Capital Group, points out, higher COLAs mean more money flowing out of the Social Security system.That puts additional stress on the already-strained trust fund, raising questions about the long-term sustainability of the program.
And while your check might go up, so do your expenses—especially for healthcare. Medicare premiums have been rising faster than inflation, which means that even a bigger Social Security check might not be enough to cover all your increased costs.
What Should You Do Now?
So, what’s a savvy retiree to do? Here are a few tips to help you stay ahead of the curve:- Keep an eye on announcements
- Review your budget
- Plan for higher healthcare costs
- Advocate for change
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