A new prediction from The Senior Citizens League suggests that retirees may face a significant shock when it comes to their Social Security Cost of Living Adjustment (COLA) next year. The non-partisan advocacy group predicts that the 2026 COLA will be 2.1%, based on data from the Bureau of Labor Statistics’ CPI-W index.
This prediction reflects cooling inflation, which could lead to the lowest COLA since the start of the COVID-19 pandemic. In contrast, last year’s COLA was 2.5%, down from a steep 8.7% in 2023.
The Senior Citizens League Executive Director, Shannon Benton, warns that even if inflation is slowing, it doesn’t mean seniors are catching up. “Inflation slowing down doesn’t mean that seniors are catching up,” she said. “It’s essential that Congress acts quickly to fix years of sub-par COLAs and help give seniors the quality of life they deserve.”
According to TSCL survey data, 67% of seniors rely on Social Security for more than half their income. However, even with slowing inflation, prices will still grow at a slower pace, leaving many seniors facing budget shortfalls.
The report highlights the need for Congress to address the current thresholds used to determine if Social Security benefits are subject to taxes. The TSCL advocates for eliminating taxes on Social Security benefits, which would make a significant difference for seniors.
As of now, 62% of older Americans worry that their retirement income won’t even cover essentials like groceries and medical bills, according to TSCL’s 2024 Senior Survey.
Source: https://www.al.com/news/2025/01/social-security-cola-prediction-bad-news-for-retirees.html