You could be missing out—3 Social Security COLA secrets everyone should know
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If you rely on Social Security to help cover your monthly expenses, you’ve probably heard of the cost-of-living adjustment, or COLA.
Every year, this small but important percentage determines how much your monthly benefit will increase to keep up with inflation.
But behind the scenes, how COLAs are calculated—and how they actually affect your wallet—isn’t always as straightforward as it seems.
At The GrayVine, we believe knowledge is power, especially when it comes to your retirement income.
Whether you're living on a fixed budget, helping a loved one plan for the future, or just curious about what your next increase might look like, here are three essential things everyone should know about Social Security COLAs—plus tips to help make the most of every dollar.
1. How COLAs are calculated may surprise you
COLAs aren’t decided randomly.
Instead, the Social Security Administration (SSA) uses a formula tied to a specific inflation measure called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
Each fall, they average inflation numbers from July, August, and September and compare them to the same three-month period the year before.
If prices have gone up, your benefit gets a percentage bump starting in January.
The final number for the 2026 COLA won’t be announced until mid-October 2025—after September’s data comes in.
But that means this year’s increase reflects past inflation, not what’s currently happening at the grocery store, pharmacy, or gas pump.
In short: while COLAs are meant to help you “keep up,” they often lag behind your actual spending needs.
Also read: You may get more in 2026—Social Security COLA estimate sees unexpected lift
2. It’s a percentage—but your raise depends on your benefit amount
The annual COLA is given as a percentage, not a flat dollar amount.
That means the size of your increase depends on how much you already receive.
For example:
Everyone gets the same percentage, but not everyone sees the same dollar amount.
If you want to estimate your new payment ahead of time, log into your online “my Social Security” account for updates once the COLA is announced.
Also read: Could tariffs boost or shrink your Social Security COLA?
3. COLAs aren’t keeping up with real-world inflation
This is the part that often frustrates retirees.
Research by The Senior Citizens League shows that Social Security benefits have lost about 20% of their buying power since 2010.
Why? Because CPI-W doesn’t track the same spending patterns older Americans face.
It focuses on urban wage earners, not retirees.
That means essentials like prescription drugs, housing, utilities, and medical care—things seniors often spend more on—don’t carry as much weight in the formula.
So while COLAs help, they don’t always stretch far enough to meet today’s rising costs.
Also read: Social Security adjustment could hit 2.5% in 2026: Here’s what that means
What’s the 2026 outlook?
As of now, early predictions suggest the 2026 COLA could be around 2.5%, matching this year’s adjustment.
But that number could change depending on what inflation looks like through the summer.
If prices keep rising, we might see a slightly higher bump. If inflation cools, the adjustment could shrink.
Either way, it’s a good idea to prepare for only a modest increase.
How to make your Social Security check go further
If you’ve noticed your check doesn’t cover as much as it used to, you’re not alone. Here are some practical steps you can take:
Also read: Retirees must see: This new Social Security update could affect your future
Zooming out: why COLAs matter more than ever
COLAs aren’t just technical adjustments—they’re about quality of life.
A small change in your monthly check could mean the difference between comfort and stress.
That’s why many advocacy groups are pushing for an alternative inflation index that better reflects the needs of older Americans.
Until that happens, understanding how COLAs work—and how to plan around them—is one of the best ways to stay financially resilient.
Read next: Are Social Security cuts the start of bigger issues? The truth behind what’s happening
Do you feel like your Social Security is keeping up with your expenses? Have you found smart ways to stretch your income or adjust to rising prices? Drop your thoughts in the comments—your experience could help someone else in our community feel more empowered and informed.
Every year, this small but important percentage determines how much your monthly benefit will increase to keep up with inflation.
But behind the scenes, how COLAs are calculated—and how they actually affect your wallet—isn’t always as straightforward as it seems.
At The GrayVine, we believe knowledge is power, especially when it comes to your retirement income.
Whether you're living on a fixed budget, helping a loved one plan for the future, or just curious about what your next increase might look like, here are three essential things everyone should know about Social Security COLAs—plus tips to help make the most of every dollar.
Many retirees rely on Social Security as their primary income source—understanding how COLA increases work can help you plan ahead and stretch every dollar. Image Source: YouTube / CBS News.
1. How COLAs are calculated may surprise you
COLAs aren’t decided randomly.
Instead, the Social Security Administration (SSA) uses a formula tied to a specific inflation measure called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
Each fall, they average inflation numbers from July, August, and September and compare them to the same three-month period the year before.
If prices have gone up, your benefit gets a percentage bump starting in January.
The final number for the 2026 COLA won’t be announced until mid-October 2025—after September’s data comes in.
But that means this year’s increase reflects past inflation, not what’s currently happening at the grocery store, pharmacy, or gas pump.
In short: while COLAs are meant to help you “keep up,” they often lag behind your actual spending needs.
Also read: You may get more in 2026—Social Security COLA estimate sees unexpected lift
2. It’s a percentage—but your raise depends on your benefit amount
The annual COLA is given as a percentage, not a flat dollar amount.
That means the size of your increase depends on how much you already receive.
For example:
- If you receive $2,000 a month and the COLA is 2.5%, you’ll get a $50 monthly increase.
- If you receive $3,200, your bump would be $80.
Everyone gets the same percentage, but not everyone sees the same dollar amount.
If you want to estimate your new payment ahead of time, log into your online “my Social Security” account for updates once the COLA is announced.
Also read: Could tariffs boost or shrink your Social Security COLA?
3. COLAs aren’t keeping up with real-world inflation
This is the part that often frustrates retirees.
Research by The Senior Citizens League shows that Social Security benefits have lost about 20% of their buying power since 2010.
Why? Because CPI-W doesn’t track the same spending patterns older Americans face.
It focuses on urban wage earners, not retirees.
That means essentials like prescription drugs, housing, utilities, and medical care—things seniors often spend more on—don’t carry as much weight in the formula.
So while COLAs help, they don’t always stretch far enough to meet today’s rising costs.
Also read: Social Security adjustment could hit 2.5% in 2026: Here’s what that means
What’s the 2026 outlook?
As of now, early predictions suggest the 2026 COLA could be around 2.5%, matching this year’s adjustment.
But that number could change depending on what inflation looks like through the summer.
If prices keep rising, we might see a slightly higher bump. If inflation cools, the adjustment could shrink.
Either way, it’s a good idea to prepare for only a modest increase.
How to make your Social Security check go further
If you’ve noticed your check doesn’t cover as much as it used to, you’re not alone. Here are some practical steps you can take:
- Use personal savings strategically: If you have a retirement fund or emergency savings, consider using it to fill short-term gaps.
- Look into part-time or seasonal work: Even a few hours a week can make a noticeable difference—and may come with other benefits like social engagement.
- Apply for extra help: Programs like SSI (Supplemental Security Income), SNAP (Supplemental Nutrition Assistance Program), or Medicare Savings Programs can help with essentials.
- Review your monthly budget: Track expenses and look for areas to trim—whether that’s switching utility providers, cutting unused subscriptions, or shopping around for better prices.
Also read: Retirees must see: This new Social Security update could affect your future
Zooming out: why COLAs matter more than ever
COLAs aren’t just technical adjustments—they’re about quality of life.
A small change in your monthly check could mean the difference between comfort and stress.
That’s why many advocacy groups are pushing for an alternative inflation index that better reflects the needs of older Americans.
Until that happens, understanding how COLAs work—and how to plan around them—is one of the best ways to stay financially resilient.
Read next: Are Social Security cuts the start of bigger issues? The truth behind what’s happening
Do you feel like your Social Security is keeping up with your expenses? Have you found smart ways to stretch your income or adjust to rising prices? Drop your thoughts in the comments—your experience could help someone else in our community feel more empowered and informed.
