Social Security cost-of-living adjustments (COLAs) play a crucial role in determining how much older Americans can afford to live on their retirement income. This year’s increase is important, but next year’s might be less so.
Estimates for the 2026 COLA are being made, with The Senior Citizens League predicting a raise of 2.4%. While this is an increase from the earlier 2.3% projection, it may still not keep pace with inflation.
In fact, 94% of seniors surveyed said they thought the 2025 Social Security COLA was too low. If next year’s COLA is lower than this year’s, it could exacerbate concerns about living on fixed income in the near future.
However, there are steps that can be taken to avoid relying on Social Security COLAs for retirement income. Saving consistently, even with small contributions to a 401(k) or IRA, can make a significant difference over time. For example, saving $200 per month for 35 years at an 8% return could result in a nest egg worth over $413,000.
By taking proactive steps now and building a substantial retirement savings cushion, seniors can mitigate the impact of future COLA increases or decreases on their living costs.
Source: https://www.fool.com/retirement/2025/06/14/social-securitys-2026-cola-has-an-unpleasant-surpr