Social Security’s Disappointing 2026 COLA: The Numbers Don’t Lie

Social Security’s 2026 COLA resulted in retirees getting a 2.8% benefits increase. COLAs, or Cost of Living Adjustments, cause benefits to increase in most years to protect retirees from inflation eating away at their monthly checks. Unfortunately, while the 2.8% COLA was larger than the 2.5% COLA retirees collected in 2025, it is still a big disappointment for seniors. 

Here’s why the 2026 COLA is not great for retirees, and why many seniors collecting these benefits could find themselves struggling despite the fact that their monthly income went up. 

These numbers show the 2026 COLA was a huge disappointment

The 2026 Cost of Living Adjustment is a huge disappointment for many clear reasons that can’t be disputed, since the numbers don’t lie:

• The COLA was one of the lower ones in the post-pandemic era.  The 2026 Cost of Living Adjustment was one of the lowest raises since before the COVID-19 pandemic upended society. In 2022, for example, the COLA was 5.9%, and in 2023, it was 8.7%. The 2024 year brought another generous COLA at 3.2%, while 2025 offered seniors an even-smaller 2.5% raise. Older Americans who left work during the pandemic and who have spent much of their retirement seeing big benefit increases are almost assuredly going to be disappointed with such a small one.
• A good portion of the COLA is going to disappear for many retirees.  Another big reason the 2026 COLA is so disappointing is that many retirees are going to lose a lot of it. That’s thanks to the increase in Medicare premiums, which are rising from $185 in 2025 to $202.90 in 2026. Since retirees typically pay for Medicare premiums out of their Social Security checks, a big premium increase reduces how much of the COLA they actually keep. This Medicare increase is one of the biggest in recent years, so it will hit the COLA especially hard. 
• COLAs haven’t been keeping up. A third big problem with the COLA is that it was calculated using a formula that is clearly very flawed. The COLA formula measures how much inflation retirees experience by looking at changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-W undercounts inflation experienced by retirees due to the fact that urban wage earners tend to spend less than seniors on spending categories that inflation hits especially hard. The Senior Citizens League projects that Social Security benefits have lost around 20% of buying power since 2010 due to this issue. Since the COLA formula remains unchanged, this trend continues into 2026.

The numbers here clearly don’t lie — the COLA is lower than seniors are used to, it’s made lower still by rising Medicare premiums, and it’s lower than it should be because it doesn’t accurately measure inflation experienced by retirees.

What can seniors do about the disappointing COLA?

Retirees need to be aware of these problems with the COLA so they can make a budget plan that takes into account how much of a disappointment the COLA is and how little it will do to help them avoid losing ground.

An experienced financial advisor can help retirees plan for how to cover their costs with Social Security and other income from investments so they can achieve as much financial security as possible given the resources available to them.