...
By Aliss Higham
Reporter
0
Share
Newsweek is a Trust Project member
See more of our trusted coverage when you search.Prefer Newsweek on Googleto see more of our trusted coverage when you search.
The Cost of Living Adjustment (COLA) that increases Social Security benefits every year is likely to be lower than in previous years, new forecasts suggest.
Why It Matters
The Social Security Administration (SSA) pays out billions of dollars in benefits every month to nearly 70 million recipients. These benefits are, more often than not, increased every year to reflect inflation and the rising cost of living.
Read More on News
What To Know
The Senior Citizens League (TSCL) and independent Social Security and Medicare analyst Mary Johnson both expect the Social Security annual increase to drop by 0.3 percent, from 2.5 percent for benefits paid in 2025 to 2.2 percent for 2026.
The TSCL figure is down 0.1 percent from its February forecast.
COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which tracks spending by working Americans. The Bureau of Labor Statistics conducts a quarterly survey to assess the spending habits of American citizens, analyzing price fluctuations for approximately 80,000 products. The resulting data is then aggregated into an index that measures changes in percentage.
...
Every year, the COLA is based on the average CPI-W in the third quarter of the current year and the average CPI-W in the same period of the previous year. If there is an increase, that percentage is rounded to the nearest 10th of 1 percent, and that determines how much benefits will be boosted by.
The latest COLA predictions come during uncertain economic times, so it is likely there will be a variety of figures touted before the official announcement by the Social Security Administration (SSA) in October.
According to the most recent Bureau of Labour Statistics report, in February the overall CPI rose by 0.2 percent, which is a slowdown from January's monthly 0.5 percent gain. Annual inflation also showed signs of improvement, easing to 2.8 percent from 3 the previous month.
The amount benefits increase by every year is not set in stone. In 2024, Social Security benefits increased by 3.2 percent. In 2023, a historic rise of 8.7 percent was granted to retirees and other benefit claimants because of runaway inflation caused by the nation's recovery from the coronavirus pandemic.
Much more often than not, there is an annual boost in benefits, but sometimes this is not the case—in 2016, there was no increase due to low inflation.
Who Gets the Increase and When?
All SSA-administered programs are subject to the annual COLA. These include the following:
- Retirement benefits, including spouses who qualify for Social Security benefits based on their partner's earnings
- Survivor benefits
- Supplemental Security Income
- Social Security Disability Insurance
COLA increases are applied in January 2026.
What People Are Saying
Mary Johnson, an independent Social Security analyst, said: "COLA doesn't keep pace with real inflation. The year-over-year rate of inflation in February for the CPI-W is now up to 2.7 percent, meaning our 2.5 percent COLA that we received for 2025 is falling behind real inflation."
Shannon Benton, executive director of the Senior Citizens League, told MarketWatch: "If COLA comes in where forecast, seniors will be struggling. We all know prices continue to be high."
What Happens Next
The official announcement of the COLA for 2026 is due in October.
View 0 Comments
Submit Correction
View Editorial & AI Guidelines