For those receiving Social Security, Cost-of-Living adjustments (COLAs) are essential to quality of life. These increases, which happen each year, are not simply “raises” for the retirement community; they are inflation-based adjustments, corresponding to current economic events. Tuning in for the annual COLA information announcement is an important moment for those living off social security.

Experts like to estimate what the upcoming year’s adjustment will be. Projections are based on CPI-W figures, which look at prices for an assortment of goods. The cost of these goods and services are later used to determine the final COLA every October. Recent inflation data leads experts to believe the 2026 adjustment will be quite modest. In fact, it may be one of the smallest in the past handful of years. 

This slideshow dives into all things COLA, including how they work and how experts make projections. We also detail how COLAs can often fail to provide the retirement community with adequate funds. This information can help seniors prepare a future financial plan.

Why Social Security COLAs Matter

• Social Security COLAs help monthly benefits keep up with inflation.
• They’re designed to preserve purchasing power over time.

What is a COLA?

• COLA is an acronym for Cost-of-Living Adjustment.
• This adjustment is not a raise, but an increase based on inflation.

How Are COLAs Determined?

• COLAs are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
• The third quarter CPI-W data (from July, August, and September) determines the adjustment.

2026 COLA Estimates So Far

• The Senior Citizens League currently projects a 2.5% COLA for 2026.
• This estimate is based on recent CPI-W data trends.

How This Compares to Past Years

• The projected 2.5% COLA would be the smallest increase in benefits since 2021.
• Pandemic-era inflation previously drove COLAs much higher.

Why it’s Lower This Year

• Compared to the pandemic years, inflation has slowed.
• Lower price growth equates to smaller adjustments.

What Retirees Need to Watch

• CPI-W data from July-September of 2025 will ultimately determine the next COLA.
• The official announcement is expected in October 2025.

Will it Be Enough?

• COLAs often fail to accurately match seniors’ cost increases.
• Healthcare and housing rise faster than general inflation.

How to Prepare Financially

• Financial advisors can help adjust withdrawal strategies and budget accordingly.
• Planning ahead can protect your standard of living.

What’s Next?

• Watch for updated projections each month based on new CPI-W data.
• The July CPI data will begin shaping the final 2026 COLA.

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