Retirees won't know how much higher their Social Security benefits will be in 2026 until mid-October. But that doesn't mean they can't at least have a clue what the increase might be.
The Senior Citizens League (TSCL) recently updated its forecast for the 2026 Social Security cost-of-living adjustment (COLA). If you're a retiree, here's how much your benefits could increase based on the nonprofit organization's estimate -- and why it might not be enough.
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The latest COLA estimate
The Social Security Administration (SSA) calculates the annual COLA using an inflation metric called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The agency determines the percentage increase (if any) of the average CPI-W during the third quarter of the current year compared to the average CPI-W during the third quarter of the previous year.
In July, the CPI-W rose 2.5% year over year. If this rate of increase remains steady, the 2026 COLA would be 2.5%, exactly the same as the benefit increase retirees received this year. However, TSCL doesn't think the CPI-W rate of growth will remain the same.
The nonprofit seniors advocacy group uses a statistical model that includes inflation, interest rate, and unemployment data to estimate the next COLA. The organization issues a new COLA prediction each month. Its estimated COLA has steadily risen over the past three months as inflation has inched higher.
In May, TSCL projected that the 2026 Social Security COLA would be 2.5%. Its announced an estimated COLA in June of 2.6%. TSCL's latest COLA forecast, released last week, was 2.7%.
Not enough?
Will a 2.7% Social Security benefit increase be enough for most retirees? Probably not.
TSCL recently conducted a survey that found nearly two-thirds of seniors weren't satisfied with the amount of their monthly Social Security benefits. Even more strikingly, a whopping 94% said they thought the 2025 COLA of 2.5% was too low to keep up with inflation.
TSCL Executive Director Shannon Benton doesn't think a 2.7% COLA will correct this issue. She stated last week: "With the COLA announcement around the corner, seniors across America are holding their breath. While a higher COLA could be welcome because their monthly benefits will increase, many will be disappointed."
Part of the problem lies with the inflation metric the COLA uses. The CPI-W doesn't focus specifically on expenses incurred by seniors. Some argue that the metric doesn't accurately reflect retirees' spending and the higher prices they incur, especially with healthcare.
Another factor is timing. Retirees pay higher costs before the COLA intended to offset those higher costs goes into effect.
What can retirees do?
It's entirely possible that the 2026 Social Security COLA won't be enough to cover the higher costs that retirees incur. What can they do to address this issue?
Perhaps the least popular alternative is to watch expenses even more closely. This could be difficult for many seniors who already pinch their pennies to make ends meet. For those in this group, take advantage of any government program that can reduce costs, such as the Medicare Part D Extra Help program for individuals with limited income.
Retirees with access to other income sources, such as IRAs and 401(k) plans, might need to withdraw more from those accounts to cover their higher cost of living. Talk to a reputable financial planner first, though, to ensure the retirement accounts won't be depleted too quickly.
Some seniors might consider working part-time to boost their income enough to make up for an insufficient Social Security COLA. However, this won't be an option for everyone.
For retirees seeking a broader solution to the underlying problem, consider advocating for a change to how Social Security COLAs are calculated. TSCL's survey found that 96% of seniors favor reforming the COLA calculation, with the most popular solution being replacing the CPI-W with an inflation metric that better reflects seniors' spending. Calling congressional representatives is one way to push for such changes.
