Baby Boomers On Social Security Have Just Days To Pay Attention To This
We’re reaching a point during the year when it’s (sadly) time to say goodbye to summer and gear up for fall. For older Americans, this is a very crucial time of the year. Not only is fall when Medicare’s…
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We’re reaching a point during the year when it’s (sadly) time to say goodbye to summer and gear up for fall. For older Americans, this is a very crucial time of the year.
Not only is fall when Medicare’s open enrollment period takes place, but it’s also when the Social Security Administration announces a cost-of-living adjustment, or COLA, for 2026.
Many baby boomers on Social Security are hoping that 2026’s COLA will be more generous than the 2.5% COLA they received at the start of the current year. And initial estimates are saying that may be the case.
The nonpartisan Senior Citizens League is projecting that 2026’s Social Security COLA will amount to 2.7% based on the inflation readings that have been released to date.
Meanwhile, in just a couple of weeks, the Bureau of Labor Statistics is set to release another set of inflation data. And it could have a huge impact on next year’s Social Security COLA.
How Social Security COLAs are calculated
The purpose of Social Security COLAs is to make sure seniors don’t lose out on buying power due to inflation, which is a natural and expected part of the economy.
Social Security COLAs are calculated on a specific index called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). When there’s an increase in the CPI-W from one year to the next year, Social Security benefits are eligible for an increase.
Specifically, Social Security COLAs are based on CPI-W readings during the months of July, August, and September.
July’s reading has already been released. However, August’s reading is set to be released on September 11. That data should give experts a clue as to what Social Security COLA baby boomers can expect in the new year.
There’s still the possibility of a larger COLA in 2026
A 2.7% Social Security COLA in 2026 would be an improvement over 2025’s raise. And retirees collecting benefits should know that it’s possible that next year’s COLA will end up being higher than 2.7%.
However, that’s not necessarily a good thing. Since COLAs are tied directly to inflation, a larger one simply means that costs have gone up more.
Think about it this way. Let’s say your local movie theater runs a promotion where you get $2 off of tickets if you’re 65 and older. But let’s say that same theater also raises ticket prices by $2.50.
At the end of the day, you’re not going to benefit, because even though you’re getting a generous promotion, it’s not enough to offset the higher cost of seeing a movie.
Social Security COLAs have long failed to actually keep pace with inflation, even though that’s their purpose. So if there ends up being a larger COLA in 2026, it will come at the expense of an uptick in inflation. And chances are, that COLA also won’t be enough to help seniors keep up with their costs.
An official COLA announcement should come out in mid-October. Until then, stay tuned for September’s inflation data so you can get some more clues as to what to expect in 2026.
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Maurie Backman has more than a decade of experience writing about financial topics, including retirement, investing, Social Security, and real estate. Her work has appeared on sites that include The Motley Fool, USA Today, U.S. News & World Report, and Kiplinger.
Prior to becoming a full-time financial writer, Maurie worked in the financial industry trading distressed debt. She then changed course and spent a few years designing electronic toys. After a stint in content marketing and UX, she shifted back into writing and has since covered everything from the housing market to estate planning to Medicare.
When she's not busy writing, Maurie can be found hiking, walking her dogs, driving her kids to their various sports practices and games, and curling up with a good book. She cooks on occasion and bakes way too often.
