Bad news for retirees: According to experts the 2026 Social Security COLA may be the lowest in recent years

Millions of Americans rely on Social Security payments to help make ends meet each month. In order to keep benefits from losing purchasing power, the Social Security Administration automatically increases them in line with inflation.

The annual boost, known as the cost-of-living adjustment (COLA), is applied to benefits annually in January. The SSA announces what the official COLA will be for the following year in October, but The Senior Citizens League has come out with a forecast for the 2026 COLA to help beneficiaries plan ahead.

The advocacy group for seniors has now raised its Social Security COLA prediction for 2026 to 2.4%, up from 2.3% last month. However, that is still below the 2.5% COLA increase that was applied to benefits in 2025 and would be the lowest in the past five years.

How is the COLA calculated?

The increase to the COLA is made based on the annual increase in the Consumer Price Index for Salaried Workers in Urban Areas and Administrative Workers (CPI-W).

To determine this, SSA compares the CPI-W for the third quarter of the year - July, August and September - that is prior to the CPI-W for the third quarter of the current year. The difference between one and the other will be the equivalent of the increase in COLA.

In recent years, due to higher-than-normal inflation Social Security have seen bigger increases with the 8.7% COLA in 2023, the largest in four decades. If The Senior Citizens League’s 2026 COLA forecast holds, it would be the smallest since 2021 when benefits got a boost of only 1.3%.

However, there is still time to go before the SSA will begin to make its calculations for the 2026 COLA. The Federal Reserve is working to lower inflation down to its target of 2%, but experts are predicting that Trump’s tariffs could result in higher prices in the coming months.

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