Social Security COLA for 2026 Projected at 2.4%, Lowest in Five Years
WASHINGTON, D.C., May 14, 2025 – The Social Security cost-of-living adjustment (COLA) for 2026 is projected to be 2.4%, according to the latest estimate from The Senior Citizens League (TSCL), a nonpartisan senior advocacy group. This forecast, based on April 2025 Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) data, marks the smallest annual benefit increase since 2021’s 1.3% adjustment and falls below the 2.5% COLA for 2025. The projection aligns with cooling inflation, which dropped to a 12-month rate of 2.3% in April, the lowest since 2021, per the Bureau of Labor Statistics.
The COLA, designed to protect the purchasing power of over 70 million Social Security and Supplemental Security Income beneficiaries, is calculated using third-quarter CPI-W data (July to September) compared to the previous year. TSCL’s estimate, up from 2.3% in April but down from earlier 2025 projections, reflects a slowdown in inflation from pandemic-era highs. Independent analyst Mary Johnson projects a slightly lower 2.2% COLA, citing stable consumer prices but warning of potential upward revisions due to inflationary pressures from proposed tariffs.
If the 2.4% COLA holds, the average retired-worker benefit, currently $1,976 per month as of January 2025, would rise by approximately $47 to $2,023, crossing the $2,000 threshold for the first time—a psychological milestone but one critics argue is insufficient. TSCL reports that Social Security’s purchasing power has declined 20% since 2010, as COLA calculations based on CPI-W fail to capture seniors’ higher spending on shelter (4% inflation) and medical care (3% inflation), which outpace the projected adjustment. A 2024 TSCL survey found 72% of retirees believe COLAs understate their rising costs.
Economic uncertainty, particularly from President Donald Trump’s proposed 10% tariffs (partially paused for 90 days as of April 2025), could drive inflation higher, potentially increasing the 2026 COLA to 2.5% or more, per Johnson. However, TSCL’s Shannon Benton warns that tariffs may raise costs for essentials like food, drugs, and medical equipment, disproportionately impacting seniors and offsetting COLA gains. The official COLA will be announced by the Social Security Administration on October 15, 2025.
Critics, including TSCL, advocate switching to the Consumer Price Index for the Elderly (CPI-E), which better reflects retiree expenses, potentially yielding higher COLAs. Conversely, some, like the Cato Institute, argue for a chained CPI, claiming it would ensure solvency while maintaining purchasing power. The Old-Age and Survivors Insurance Trust Fund faces depletion by 2033, and a higher-than-expected COLA could hasten this timeline, raising concerns about future benefit cuts.
Sources: CNBC, Kiplinger, Investopedia, The Motley Fool, Newsweek, AOL, USA Today, SSA.gov, posts on X
