When the Social Security Administration (SSA) announced a 2.8% cost-of-living adjustment (COLA) for 2026, many Social Security recipients were not thrilled. While something is better than nothing, retirees worry that the slight increase will not keep pace with the ever-rising cost of living.
If you're among those who feel your COLAs aren't keeping pace, here are some of the reasons you may be right.
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1. The way inflation is measured
For the past 52 years (since 1973), inflation and subsequent COLAs have been determined by comparing the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter of the current year (July through September) to the same period the year before.
Advocacy groups like the Senior Citizens League (TSCL) have long argued that the CPI-W excludes or underestimates expenses that may be less important to current wage earners, but are critical to seniors.
Instead of using CPI-W as a measure of inflation for seniors, some advocacy groups say the Consumer Price Index for the Elderly (CPI-E) would better reflect how much seniors really spend in retirement.
2. It's impossible to recover money already spent
COLA methodology measures inflation that you've already experienced. By the time the COLA is announced each October, you've already paid for inflated goods or services. Receiving a slightly larger Social Security check months later does nothing to help you recover the extra money already spent. Further, once businesses have raised prices, those prices are unlikely to be reduced.
When you hear that inflation is easing, it doesn't mean consumer prices are going down. It means they aren't rising as quickly as before.
3. Increased healthcare costs
The need for medical care tends to rise as people get older. Unfortunately, healthcare costs consistently rise faster than inflation, meaning those who need it most pay more. Between 2000 and 2024, the price of medical care -- including services, insurance, prescriptions, and medical equipment – rose by 121.3%. In contrast, the price of consumer goods and services rose by 86.1%.
There's no way to outrun the reality that seniors spend a larger portion of their monthly income on healthcare. This is especially true of those on a fixed income with little wiggle room. While COLAs are nice, they often can't keep up with growing medical expenses.
4. The cost of everyday living
Retiring doesn't put a stop to everyday expenses. According to the Harvard University Joint Center for Housing Studies (JCHS), between 2020 and 2024, home prices increased by 47%. At the same time, rents increased 26%. Although housing has always been a necessity, those who planned for retirement before 2020 had no way of knowing how dramatically prices would rise.
Another necessity is food. Since 2020, the price of groceries has jumped by 29%, enough to put a deep dent in anyone's budget. If you're feeling it now, you're not alone. The largest jump in almost three years occurred in September 2025.
While food inflation affects everyone, it can disproportionately strain retirees' budgets, particularly those who rely solely on Social Security benefits to get by.
Social Security COLAs may sometimes be disappointing, but it's better to have them than not. Consider 1980, 1981, and 2002, when COLAs were 14.3%, 11.2%, and 8.7%, respectively. It's difficult to imagine how retirees would have gotten by during those periods of high inflation without an increase in benefits.
In the meantime, if you want to get in on the conversation, you can make your voice heard by joining forces with the National Council on Aging, AARP, or the Senior Citizens League.
