The 2026 Social Security Cost-Of-Living Adjustment Is Expected To Exceed This Year’s Increase

Millions of Social Security beneficiaries are waiting to find out the 2026 Cost-of-Living Adjustment (COLA), which will be announced in October 2025.

The Social Security Administration (SSA) determines this yearly adjustment based on consumer price index data, focusing heavily on categories such as housing, transportation, and groceries.

Changes in these key areas of spending can greatly influence the final percentage increase.

While COLA provides some relief from inflation, research shows that benefits have lost considerable purchasing power over the past two decades.

Senior advocacy groups, like The Senior Citizens League (TSCL), are pushing for solutions to help retirees cope with rising costs.

How the COLA Is Determined

The SSA calculates the COLA by comparing the average CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers) for July, August, and September of the current year with the same period from the previous year.

• If prices rise, the percentage difference becomes the COLA increase.
• This adjustment applies to Social Security and Supplemental Security Income (SSI) payments starting January of the following year.

For 2026, July data alone suggests a 2.4% increase. However, the final percentage will be confirmed in mid-October, once August and September figures are added. TSCL’s current projection points to a 2.7% COLA, expecting more price hikes in the months ahead.

Declining Purchasing Power Over Time

Although COLA is designed to protect seniors from inflation, benefits have been losing value for years. A 2024 TSCL report revealed that since 2010, the purchasing power of Social Security benefits has fallen by 20%.

This means retirees today can buy far less with their monthly checks than they could just 15 years ago. Shannon Benton, TSCL’s Executive Director, emphasized,

“The data in this study confirms what seniors have been telling us for years: Social Security checks aren’t keeping up with inflation.”

The $1,400 One-Time Payment Proposal

To address the ongoing decline, TSCL has proposed a one-time $1,400 payment for Social Security recipients. This would provide immediate relief but would still fall short of the estimated $4,440 per year increase needed to fully restore the lost value since 2010.

So far, no lawmakers have committed to advancing this proposal, though TSCL continues to advocate for it alongside other measures.

A Better Inflation Measure for Seniors

TSCL is urging Congress to create a Consumer Price Index for the Elderly (CPI-E), which would better reflect the spending habits of older Americans.

• Unlike the current CPI-W, the CPI-E would place greater weight on healthcare costs, as seniors typically spend more on medical services and prescriptions.
• Senator Bernie Sanders of Vermont supports this idea and has called for the Bureau of Labor Statistics to manage the index.

Poverty Among Older Americans

Another pressing concern is the 7.3 million seniors surviving on $1,000 a month or less, an amount below the official poverty line.

While the national poverty rate has generally fallen in recent years, the rate among older adults is increasing.

Advocates warn that without substantial reforms, millions more could face financial insecurity, making it harder to afford essentials like housing, food, and medical care.

Why This Matters for 2026 and Beyond

The 2026 COLA will help offset some price increases, but without structural changes, many seniors will continue to struggle.

The gap between benefit growth and real-world expenses—especially in healthcare—will likely keep widening.

As inflation pressures remain, organizations like TSCL are intensifying their push for permanent adjustments that can protect future retirees from losing purchasing power.

The upcoming 2026 Social Security COLA announcement will be a critical moment for millions of Americans relying on these benefits.

While the adjustment offers yearly protection against inflation, the long-term erosion of purchasing power is a growing concern.

Proposals like the $1,400 one-time payment and a senior-focused inflation index aim to provide more accurate and fair increases.

However, with poverty levels among seniors rising, broader reforms are urgently needed to ensure that Social Security fulfills its promise of financial stability for older Americans.

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