Social Security’s recent cost-of-living adjustment (COLA) of 2.5% has left many retirees feeling frustrated, as it barely kept pace with rising expenses. The latest projections for the 2026 COLA suggest it might be larger than expected, but experts caution that its impact will depend on individual perspectives.
The Social Security Administration calculates COLAs by analyzing differences in average third-quarter inflation data from the previous year. For 2025, this was based on a 2.5% increase. The next update is due October 15, 2025, when the September CPI-W figure will be released.
Several organizations, including The Senior Citizens League (TSCL), provide estimates of COLAs using statistical models that consider factors like inflation rates and unemployment rates. While TSCL’s predictions have been accurate in the past, the actual number is still uncertain.
Some argue that a larger COLA would boost checks, but this often comes at the cost of inflation eating into its value. The CPI-W, currently used to calculate COLAs, excludes retiree households from its data set, leading some to propose using the Consumer Price Index for the Elderly (CPI-E) instead.
The proposed change has been floated as part of broader Social Security reforms aimed at addressing the program’s $23 trillion funding shortfall. However, no concrete action has been taken yet. Until October, the 2026 COLA remains unclear, and planning for next year’s budget will have to wait.
Source: https://www.fool.com/retirement/2025/02/22/social-security-2026-cola-bigger-boost-expected