Estimates for Social Security’s annual Cost of Living Adjustment (COLA), which provides beneficiaries with an automatic raise at the start of each year, continue to rise. The latest forecast from The Senior Citizens League, a nonpartisan group, predicts that the COLA for 2026 will be 2.6%. This is slightly up from last month’s forecast of 2.5% and marks the fifth consecutive month of upward revisions, largely due to persistent inflationary pressures.
If this forecast holds true, the 2026 COLA will only be a modest 0.1% higher than the 2025 COLA increase, which is set at 2.5%. This will also be the second lowest increase since 2021, when the COLA was just 1.3%. Following that year, COLAs surged due to the economic impact of the COVID-19 pandemic, reaching 5.9% in 2022 and 8.7% in 2023. However, the increase returned to 3.2% in 2024, with a more moderate bump expected for 2025 and 2026.
The Social Security Administration (SSA) uses the COLA to help ensure that beneficiaries’ purchasing power is not diminished by inflation. This adjustment is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter of the year, which includes the months of July, August, and September. The SSA then compares this data with the CPI-W from the same period in the previous year to determine the adjustment.
The COLA announcement is typically made in early October, with the exact figures usually released on October 10. With approximately 72.5 million Social Security recipients in the U.S. – including 69 million traditional Social Security beneficiaries and 7.5 million receiving Supplemental Security Income – the COLA has a direct impact on millions of Americans, ensuring their benefits keep pace with inflation.
