Social Security recipients can expect a raise in 2026, with the latest cost-of-living adjustment (COLA) set to take effect in January. Beneficiaries will see their payments increase by 2.8% next year, amounting to around $56 per month for the average retiree.

But the COLA itself doesn't tell the whole story. Next year's adjustment will likely fall short for retirees, and history has some not-so-good news about Social Security's future.

Image source: Getty Images.

Most retirees are unhappy with the COLA

A whopping 68% of current retirees say that the 2026 COLA will not provide any meaningful help in covering everyday expenses, according to a recent survey conducted by The Motley Fool. Only 11% of respondents said it would help "significantly."

Unfortunately, this has been an ongoing trend with Social Security. The annual COLA is designed to help benefits keep up with rising costs, but historically, it's failed to do exactly that.

In fact, between 2010 and 2024, Social Security lost 20% of its buying power, according to a report from nonpartisan advocacy group The Senior Citizens League. In that same time frame, there were only five years in which the COLA outpaced the inflation rate for that year.

If history shows us anything, it's that Social Security is not nearly as reliable as it once was. Between eroding buying power and stubbornly high costs -- at least partially due to the Trump administration's tariff policies -- COLAs aren't going as far as they used to. As we head into 2026, retirees can likely expect that trend to continue.

Potential benefit cuts could worsen the problem

Social Security's struggle to maintain purchasing power is only one of the problems plaguing the program. Its trust funds are also in a difficult position, and if lawmakers don't find a solution within the next few years, it could result in benefit cuts.

Social Security benefits are funded primarily through payroll taxes. Current workers pay into the system through taxes, and that money is then funneled out to beneficiaries. However, taxes haven't been enough to fully fund benefits, leading to a deficit.

To bridge the gap, the Social Security Administration has been pulling money from its two trust funds. That has helped avoid benefit cuts for now, but those trust funds are expected to run out by 2034, according to the most recent estimates from Social Security's Board of Trustees.

If it comes to that, the program's income sources will only be enough to cover around 81% of scheduled benefits. In other words, if nothing happens between now and 2034, benefits could be slashed by close to 20%.

What can you do right now?

If you're already retired and Social Security is your primary source of income, your options are limited. If you can swing it, continuing to work in some capacity can reduce your dependence on Social Security and strengthen your savings.

That won't be possible for everyone, so if that's the case for you, simply keeping realistic expectations about how far Social Security will go might be the best thing you can do right now.

If you haven't started taking Social Security yet, you have a few more options:

• Delay claiming benefits: For every month you wait past age 62 to claim, you'll receive slightly larger checks. The average retiree collects around $800 per month more at age 70 than at 62, according to data from the Social Security Administration, which can go a long way if benefits lose more buying power or face cuts.
• Work longer or increase your income: Your benefit is calculated based on an average of your earnings throughout the 35 years you earned the most. The more years you work and the more you earn, the higher your future benefit could be.

Social Security isn't as strong as it once was, and based on its history of consistently losing buying power, that may not change anytime soon. But by taking even small steps to increase your benefit, you can better prepare for whatever the future may hold.